Blain’s Morning Porridge May 28th 2025 – Stories from the end of American Exceptionalism
“I have no spur to prick the sides of my intent, but only vaulting ambition, which overleaps itself and falls on the other.”
What will the American mega-stocks be worth tomorrow? What will they be worth when Asian markets are larger, more competitive and more open, and Europe is closed to them? The Age of Trump has catalysed the end of the Age of American Exceptionalism. Apple and Telsa provide scenarios on how it all may come about.
She-who-is-Mrs-Blain and I are still stormbound in Northern France… but I am massively impressed with Le Harve and Normandy.
Le Harve and Southampton in the UK, (the closest big city to Blain Manor), are intricately linked by a shared maritime heritage – famous port cities. Both were heavily bombed in WW2, and neither was reconstructed to be pretty. In one the architecture might be concrete-brutalist, but the streets are clean and public spaces are well maintained – they aren’t clogged with weeds and litter. The town centre is vibrant – there are no charity shops and few international chains. I believe there is empirical evidence that if one broken window is left unfixed, soon every other window on a building will also be smashed. Keep a city well maintained and attractive and it will thrive.
Cut costs and let a city get dirty and it will tumble into decay. Hence you get the average English high-street of betting outlets, vape-shops and “Turkish” barbers.
There is a lesson in a brief comparison between Southampton and Le Harve.
The end of US Stock Exceptionalis
Unsurprisingly I’ve been receiving some very angry emails and comments from a limited number of Americans demanding I apologise for, and tone down recent comments criticising Trump’s administration, and I retract my thesis we are at the end of the era of American Exceptionalism.
Nope. Not going to happen. I tell it like I see it.
(I was brought up to admire the USA – I love it. It is a marvellous place. My eldest son is named for my favourite American Uncle. I worked for four fantastic US firms; Morgan Stanley, Bloomberg, Bear Stearns, and BGC. I worked with wonderful US colleagues and have made tremendous contacts across US decision makers over the years. Some of my best clients are Americans – most accept I have a right to my perspectives, although many believe I am wrong and unduly pessimistic.)
All things change… Trump is a catalyst of change. That’s the reality.
The biggest harbinger of change will be the bond market – when Treasuries wobble, the US economy will shake. I’m not going go delve into that again this morning – but simply refer you to an article in the FT this morning by Edward Luce: America’s Rising “Moron Premium”.
One of the lasting changes Trump is likely to catalyse is the end of the US stock market’s global dominance – we will look elsewhere for future growth and value. There are fantastic US firms – but the degree to which they are traded at a premium will come under pressure as Trump’s policies diminish the USA’s soft power and trading advantages.
The rest of the world will be developing new products that may ultimately surpass what the American’s created during the American century – just as happened to the UK. It doesn’t mean the USA becomes irrelevant – just less huge, and less…. exceptional.
There are two examples of how this may play out this morning.
It wasn’t a great day for Elon Musk y’day.
Telsa now represents less than 1% of European car sales – demand has fallen 49% yoy! China’s BYD is now outselling Telsa 2:1 in Europe, and they are frankly a better product – according to the motor press.
The 9th test flight of his new Starship rocket blew up for the 9th time last night – hinting its’ sheer complexity is going to take longer to solve – maybe even a complete rethink. Stuff that works on one mission fails on the next. There are times when the remorseless logic of “Fail Fast – Fix Fast” crashes against the reality of “construction reality”. Musk claims its multiple problems are 80% fixed – which is 20% short of safe or usable. (Any engineer will tell you achieving the first 97% of a programme’s objectives is the easy bit, the final 3% get progressively more and more difficult.)
Space X’s Falcon 9 has done a great job doing what they made “the simple stuff” of delivering Low Earth Orbit packages, Starlink broadband satellites and won kudos for “rescuing” astronauts from the ISS after Boeing failed… Space X has made the commercialisation of near space economically feasible – what’s that worth? Ultimately trillions – the question is who will make the returns? Musk has squandered Tesla’s lead in EVs due to his multiple distractions – does he really need to go to Mars to dominate the commercialisation of Space?
It may be Space X, the world’s most valuable Private Company, is about to hit a reality check. Musk does not do failure well. Successive Starship blowups mean Space X will miss key target dates to take the US back to the moon next year on a robotic expedition. Last night Must cancelled an expected talk to Space X staff entitled The Road to Making Life Interplanetary. It was expected to confirm test flights to Mars next year (crewed by Optimus robots – another thing Musk ain’t delivered yet) before a manned mission in the near future.
However, the dearth of orders at Tesla (still the world’s most valuable auto-manufacturer – but no one can explain me why??) and the engineering problems at Space X might pall into insignificance with what might be the long-expected rift with Donald Trump. Everyone knew it was coming…. In the next few days… wait to see how bad it gets.
It’s now generally accepted, even by rabid Trump supporters, that DOGE – the Department of Government Efficiency – delivered precious little in real savings (a mere $63 bln according to Grok!), a lot of destabilisation of the government workforce, and a deal of dissatisfaction amount Trump supporting veterans and benefit recipients who found access to government support shuttered.
Now Musk has had the temerity to say Trump’s Big, Beautiful Tax Cutting Bill has undermined DOGE. Oh dear. Two narcissists fighting for the spotlight. That was always how Elon and Donnie were set to fall out.. It’s a battle Musk will lose. Badly. The Trump premium that’s supported Tesla looks flaky.
Watch that space. (Hah..)
The other story about the end of US exceptionalism is Apple.
Trump has warned CEO Tim Cook he has to make iPhones in the US, otherwise it will be tariffed to unsaleability. We know that’s not feasible commercially – and Apple, which to all intents and purposes has become a cash pile with a single product; Smartphones – is therefore in trouble.
I’ve thought about that… I’m bored with my iPhone. A thousand pounds for something marginally different from the last thousand pounds… The shiny bright thing packaging no longer impresses me.
A few weeks ago I was treated like an imbecile in one of their stores after trying to buy a new iMac computer for my home office – I complained the screen was too small, so they suggested I buy two 32 inch £4.5k screens to go with it. I demurred, they got rude about my wasting their time. I bought a better and better Dell screen online at 1/9th the cost and am using it happily with this MacAir laptop.
I have been an Apple addict for decades, but its increasingly unlikely I’ll be replacing my phone, my tablet, or my laptop with Apple in the next few years. Not just because they are overpriced and overhyped – but because they will be obsolete. The news Jony Ives has joined Sam Altman at Open AI to design next generation software confirms obsolescence approaches.
Let’s be honest – what have Apple innovated since Steve Jobs? The iWatch? When the current one fails (as I am sure it will) I’ll go back to wearing a proper watch.
The thing is… all companies have a life-cycle. Some, like oil companies, last for centuries (there is an Italian Bank Monte Dei Paschi which has been around for half a millenia), but others, especially in Tech, last for decades before corporate bureaucracy, competition, and the new, new thing replaces them.
Which is why Apple, Tesla, Meta, Alphabet all look vulnerable to the wave of instability and change Trump has unleashed…
Out of time, back to the day job, working from the yacht…
Bill Blain
Author of the Morning Porridge
Founder Windshift Capital
Partner Shard Capital
5 Comments
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I recently considered changing from an iPhone, it annoys me they keep increasing their size. It seemed so much hassle, so in the end I bought the smallest new one available, the 16e. Maybe next time but I keep saying this.
Who are these imbeciles who rage at you telling the truth? How about the latest attack on International Students. Perhaps worth a comment tomorrow. Enjoy la France!
American exceptionalism has been decaying for decades. Those who planned America’s hard turn to the right lost control a long time ago. Their strategy and tactics were more wildly successful than they ever could have imagined. And now, Trump is the escaped Frankenstein monster let loose on the village. If one steps back and takes a hard look at the actions of the Trump Administration, one can make a very compelling argument (as you, Bill, very often do here) that what will make America exceptional going forward is that it will be a nation that is dumber, poorer, sicker, and alone in the world.
No need to apologize for calling them like you see them, Bill. Everyone hates the ump until they make a “great call” in your favor…Honestly really appreciate it when you tick me off since it makes me think.
Thank you for stating the facts about the United States and the degenerate turn it has taken. You cannot change the minds of people that don’t care to listen or really don’t care. Please keep up stating the facts that some hate to hear and see in print.