Ross Rant
For those who have extensive deal experience, we know that often the initial meeting is setting things in place for the next meeting after the two sides had time to consider what was said and what the next positions need to be.
That seems to be what has occurred in Alaska.
Trump going in said he was not in a position to agree to anything until he talks to Zelensky and the NATO group.
He did exactly what he publicly said he was going to do- set the table, but not agree to any deal until has spoken to his side.
It is now clear there would be a total peace agreement not a ceasefire.
That would be a huge shift for the good if it can be done.
The media, of course, having zero deal experience, are acting like it was a failure even though they know zero of what really was discussed.
The talking heads on TV are paid to talk, so they made up stuff to sound important and intelligent, but it is all BS since they know no more than you do as to what really happened.
It makes the media nuts when they can’t get anyone to talk, so they just make it up.
A few leaks happened over the weekend, but we still do not really know what was discussed in detail, nor the many other parts.
We need to wait until the Monday meeting with Zelenskyy, and then the next meeting with Putin and to see where all this goes.
There will be much more to know after Zelenskyy meets with Trump.
If anyone thought the war was going to stop Friday afternoon, they were very naïve.
Trump was very clear on his objectives, and he seems to have achieved that- an approach to get to a deal, and some basic heads of agreement, but no final deal and no details.
Classic deal making when there are several parties to the deal who have to buy in.
Ignore the talking heads.
We need to see what happens Monday and at the next meeting which will be the real deal meeting.
If Trump does pull this off, the media will go nuts trying to find ways to attack him as he will have made one of history’s most important peace agreements.
Ignore the PPI inflation report.
It went up based mainly on a portion of professional services, but not on goods affected by tariffs. Not on housing, nor on food.
So, it is clear so far that tariffs still have not had much real impact on prices generally, and only on select goods.
September, October will be when we see if tariffs really had an affect.
Meantime, consumer spending rose nicely in July so clearly tariffs are not impacting consumers very much.
There are not yet even final trade deals signed, so it is too early to really know the final impact.
Bessent has been clear, we will not have final deals util October, so this again is not worth speculating on the unknowable.
Right after Liberation Day in April I said I thought the producers, and importers, and many retailers would eat some of the cost increase and the consumer would not eat a lot of it.
That seems to be what is happening.
The big retailers are able to spread the increased costs across a wide variety of items including those not imported, so the price increase for the tariffed merchandise carries only a very small portion.
I do not expect tariffs to create any real material inflation issue.
There will be some and the Fed will be faced with a conundrum in September as inflation ticks up a bit but the job market becomes a little softer.
They likely will cut 25, but maybe 50.
What is becoming clear is that AI is now impacting jobs.
It is being implemented faster than some believed, and many research and analytical jobs are going away.
Coders are being rapidly replaced and unemployed.
Legal associates are being replaced by AI and soon will not be needed nearly in the numbers they had been.
AI can now do the research and write the documents or pleadings, and the senior lawyer just edits.
Clearly associates will be needed to learn how to be real lawyers of the future, but it will be a different experience.
Financial analysts in Wall St will be replaced in some cases by AI which can do the research and analytics faster and better.
In corporations, people who do administrative processing functions will be replaced as systems take over producing purchase orders, accounts receivable and payable.
AI bots are taking over telephone inquires.
And all of this is just the beginning.
So far many of the displaced people are able to find another role and unemployment has remained very low.
However, we are entering an era where there will be major shifts in what humans do and what computers do and that will cause some level of turmoil for recent college grads in particular.
There will be different jobs created but for now it is unclear.
Where there is opportunity for many is in the building trades where there is a shortage of labor in many parts of the country.
There is a need for engineers and for skills like plumbers and welders as well as just laborers who install roofs.
I believe there will be a move by many away from college, and into these skill jobs which pay well and which will still be there for many years.
Robots are now taking over some parts of home building and they will be doing more on commercial projects, but for now there is a shortage of labor.
In addition to AI, robots are coming into the workplace very quickly.
Warehouses are staffed by many robots as are some production lines making cars and other products.
They are even a major factor in operating rooms.
I will be having knee replacement in January, and the surgeon told me he uses robotics which he finds improves his accuracy.
While doctors and nurses will always be needed, we will eventually have a world where AI does the diagnosis, and the robot does the surgery or treatment.
The doctor will always be needed to oversee the process and make sure to do no harm but eventually it will likely lead to much more accurate diagnosis and treatment protocols.
Regardless of what the Fed does in September, home prices have to come down.
Mortgage rates may come down a bit, but not enough to really matter.
The ten year is likely to go up a bit or stay around 4.25%, which means mortgage rates stay around 6.25%- 6.5%.
This week the media made a big deal that rates came down, but they came down by a small amount that will not really change the housing market.
The only way the housing market improves is when home prices fall by 10% in most markets.
The prices make no sense given the carry and the down payment needed.
Insurance, property taxes and maintenance are up in cost and so the price of the house has to come down to make economic sense for new buyers.
Current average prices of $450,000 requires a $90,000 down, whereas a 10% lower requires only $80,000, a big difference to young first-time buyers who have a student loan obligation.
The mortgage payment is also a couple of hundred dollars less, so the economics start to work.
Right now, it makes much more economic sense for young people to rent than to buy.
Bessent seems to recognize this issue, and he says affordability is his agenda item for the fall.
I have no idea what that will mean since he has no control over the prices and only limited ability to influence the ten-year rate.
If the economy does go up by 3% GDP growth and if the capital expenditures happen to build all the datacenters, power plants and factories, then the demand for credit will push the ten-year higher, and thus mortgage rates go higher as the spread is over the ten, and is normally around 225 BP.
The chance of mortgage rates going back to the low 5% range is nil.
It would mean the economy is weak and the capital expenditures planned would not be happening.
So, in the end, it is the price of the homes that has to come down.
The hotel industry in the US is suffering this year.
International travel to the US is down and ADR and occupancy are down while expenses, especially labor, are rising.
This confirms my warning many months ago that it was time to get out of owning hotels in most markets.
This is not likely to get much better in 2026 as labor and other costs continue to rise, and as low end labor remains in short supply, and as ADR does not rise.
We now have a situation where the Russian, Chinese and Iran economies are in serious decline.
China continues to do the wrong things to fix their problems and there seems little chance of any major changes as long as Xi is in power which is not going to change for quite a while.
Iran is about to have severe water and power shortages and a rapidly increasing crisis in their economy and ability to function.
The Russian economy is in stagflation now and is going to get a lot worse if there is no deal on Ukraine.
So, now the west.
Led by the US is in economic command and the axis of evil is in serious economic trouble which will make it harder for them to create a major new crisis.
Note that Putin brought his top economic advisors to the meeting and not generals.
In the end Russia has serious economic problems and they will get much worse if there is no deal to end the war.
Many people think Putin is not caring so much about the economy, but it was very clear to me seeing who came to Alaska that the economy is a major issue but is being covered over in public.
Putin is in need of major trade deals with the west.
China is in a similar situation which suggests that any action against Taiwan is not happening anytime soon, and maybe not at all while Trump is in office.
What is mindboggling is that Mamdani is in the lead by a wide margin.
It is all the young people who were indoctrinated in university to believe successful people are bad and are taking advantage of the rest, and they now believe it is OK to be anti-Semitic.
They seem to never have had a real econ course, and they do not pay attention to what is happening in Russia and China with their failing economies.
They ignore reality and just hate Trump and successful people.
When my generation arrived in New York to begin our careers we had no money, and everything seemed expensive.
We got roommates to help pay the rent on our crappy apartments, we ate in cheap places and made our own dinners.
We bought discount clothes in stores that specialized in off price apparel that still looked good.
Guys might recall Sy Syms and the original Barney’s.
Today’s kids want to have it all right up front with no sacrifices.
They think they are entitled which they are not so they buy the Mamdani BS about landlords over charging, food being too expensive and the wealthy not paying enough in taxes even though NY is the most taxed place in America if you live in the city.
Cuomo is a terrible candidate, and Sliwa has zero chance.
Eric Adams is actually doing a reasonable job, but has no chance because he has cooperated with Trump on ICE and crime.
There now seems like a chance Mamdani will win and NYC will be destroyed.
A real estate broker in NJ who handles commercial leasing said he used to provide analysis for prospective clients for free, but now he has so much demand by people who say they will move the business out of Manhattan if Mamdani wins that he charges for that analysis.
For Republicans, Mamdani is the greatest dream come true.
He has become the face of the DNC, and he is their best advertisement.
They will be happy if he wins as he then becomes to standard bearer along with the bartender from the Bronx and the 2026 election becomes a vote on socialism vs capitalism, law and order vs crime, blatant anti-Semitism vs tolerance.
This is the test of the politics of Obama, DEI, woke and the far-left vs capitalism and American cultural values.
This is now the inflection point I have continued to talk about.
The left just keeps on digging their hole deeper.
Now they are raging about Trump cleaning up the crime and homeless mess in DC.
How dare he put more law enforcement on the streets.
The police chief was clearly a DEI selection and not getting the job done, so when they try to replace her it is taken as terrible, and lawsuits get filed.
These actions just add to the Republican talking points for 2026.
Why would anyone be against more police and more arrests.
It simply demonstrates how out of touch the Dems are with reality.
It will be interesting to see the results at the end of the 30 day period and how the Dems will try to prevent it from continuing.
When Trump tries to extend it to other cities there will be more screaming by the left and more claims of threat to democracy.
They seem to prefer to protect illegals than their own citizens.
They will pay a big price in 2026.
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