Blain’s Morning Porridge July 23^rd 2025 – Dashed if I know… Maybe Ozzy did?

“I got rabies shots for biting the head off a bat, but the bat had to get Ozzy Shots!”

Ozzy Osbourne was an unlikely Prince of Darkness… but who’s US President? The “Trade Agreement” with Japan is a massive pre-emptive strike opportunity for Japanese Automakers. Will it benefit US Manufacturing? No way! And don’t forget your “Bullsh*t Bingo Card” for tonight’s Tesla numbers.

Forget the global economy, Gaza or Ukraine. First item on the BBC News last night was the death of legendary heavy metal rocker, professional pharmaceutical-tester, and the first reality TV show star; Ozzy Osbourne. A truly remarkable fellow. Respect for a life extremely hard lived.

I once considered myself well versed in music. Back in the late 1970s I undertook a grand project at school. I asked my whole year to list their top 30 songs and artists. I then laboriously constructed a league table – it was in pre-computer days.

The results horrified me.

The top two songs were both Black Sabbath: Paranoid and Iron Man. Acca-Daca (AC/DC) came third. (Can’t remember which song, they all sounded the same anyway.) I hated Heavy Metal. Could not get it all. Big Hair and Big Teeth. Chords even I could play.

I’d expected the top 30 musical choices of Edinburgh’s finest young gentlemen to reflect a diverse taste for cool jazz, melodic west-coast riffs, punk classics, and the eternal genius of prog rock. How wrong I was. Where are these other genres today? Heavy Metal still thrives and pays exceedingly well. I guess what I missed is the reality Heavy Metal has been Easy-Listening for generations of small boys who enjoy, but don’t waste too much time thinking about, their music.

(For the record my own list reflected just how annoying I was back then: a smattering of punk from the Clash and The Stranglers, The Teardrop Explodes, and a range of great “vibes” from Steely Dan, Little Feat, The Eagles and even some early Scottish folk-rock from Silly Wizard! I did put Kansas, Carry On My Wayward Son at No 2. I can’t remember who was no 1! Probably Steely Dan’s “Deacon Blue”.)

I still don’t get Heavy Metal – but I play the discs. I began to genuinely like Ozzy and Black Sabbath. Paranoid has me ear-wormed this morning. Once, I nearly bought a Tony Iommi signed guitar!

I oft wondered if the devil’s ultimate joke was to give the Prince of Darkness, Ozzy, such a strong Brummie accent. It is the potentially the least offensive accent on the planet. Sorry mate, but the vision of horned demons with sharp pointy sticks about their business of destroying humanity, asking each other politely about the weather in nasally Brummie is not exactly terrifying…

Well Played Ozzy!

And back to the early morning job….

I know I am supposed to explain markets each morning, but if anyone can explain the US stock market to me, I am all ears. (Fortunately, I know such a man – Julian Wheeler of Shard! Julian – help!)

The news Japan has been bounced into a “Massive Trade Agreement” with America is “interesting”. Could be worth a punt on Japanese auto-makers.

If I were a Japanese auto CEO I would be seeing this as an opportunity. While US firms struggle with the 25% tariffs on their parts-supply-chains from Mexico and Canada, and it looks like the German carmakers will be hit by 30% EU tariffs, the Japanese firm should seek to absorb as much of the 15% tariff hit as can be absorbed to be ultra-competitive. They can then flood the US market with great Japanese cars.

Its brilliant. Trump will think he’s done a great job gathering tariff revenues.  The Japanese will be arbitraging the tariff game.  Time the Japanese and others got tricksy.. Not so great for American autoworkers though.

Medium term the Japanese auto-makers will hold and even expand their US market share. They will likely outcompete the American car makers (who are already complaining deals like this don’t protect them!) Trump will still have his cosmetic win on tariffs, but as the dollar will likely continue to sink and the yen begins to appreciate, the Japanese will see their profits rise. At some stage the game will stop when the falling dollar will make imports unaffordable for US consumers. The objective for the Japanese firms will be to keep selling cars to America as long as they can, while seeking new markets for the long-term!

As for the America car industry, there will be a swing of patriots buying American cars, but the bulk of consumers are generally not daft. There is unlikely to be renaissance in American car manufacturing creating new jobs or new factories.

One day the question will be asked: Who won the tariff war? Not the USA is the likely answer. US manufacturing will wane under protectionist barriers while the rest of the world evolves under the banner of competitive trade. The economy will benefit from, say $400 bln of total tariff income per annum, but that’s a rounding error compared to the total debt. (And I haven’t even mentioned the inflation risk.)

As for the promise Japan will invest $550 bln in the US economy for 10% of the profits – why would any nation do that? The Japanese will do what they do best – smile politely. And delay till Trump is gone and saner minds prevail.

South Korean and Taiwan are said to ready to sign similar trade deals in the next few days, before next Friday’s trade agreement deadline. Trump will posture like a winner…. the rest of us will snigger.

Tonight, we get the Tesla Q2 numbers and they are going to be frankly awful. In anticipation I’ve prepared the follow Tesla Bullsh*t Bingo Card points. Award yourself 10 points if Musk says:

• “Our business is resilient. The loss of the Carbon Credit emission sales that made our car sales profitable is not a problem.”
• “We will be delivering the first fully functional Optimus Robots. Tomorrow.”
• “Telsa will be launching a new affordable model. Tomorrow.”
• “Tesla Robotaxis dominate the ride-hailing sector in Austin, Texas. Its fake news one of them had to be pulled because someone urinated in it, and it caught fire.”
• “Tesla self-drive is the best.”
• “We are not concerned by the threat of class action suits against Tesla, our self-drive is 110% safe.”
• “Tesla has no problem hiring and retaining top talent.”

Give yourself 100 points if he stands at the microphone, gives a dodgy salute and announces his new political party will win the next election.. 1000 points if he’s carried off the stage strapped to a medical gurney screaming.

Out of time, and back to the day job…

Bill Blain

Author, The Morning Porridge

CEO Windshift Capital

Partner Shard Capital