“Rethinking Investing” is legendary financial consultant Charley Ellis’ “eureka” moment when all his investment wisdom and experience came together in one short volume.

@Crash, you seem to have a thing for banks. Any particular reason?

Can someone tell me how to play this good news tomorrow? Stocks? Bonds? Gold?

Nice!
Brings to mind time in the market vs. timing the market.
https://testfol.io/?s=dgfVTheVmuy

The legal problem with President Donald Trump’s tariffs is that the United States has a Constitution, and the Constitution says that Congress has the power to impose tariffs and the president doesn’t. This is not some weird technicality; this is just what the Constitution says. “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises,” and “To regulate Commerce with foreign Nations.” But Congress did not pass President Trump’s “Liberation Day” tariffs on April 2, or any of the various up-and-down permutations since then. That was all him, acting by executive order.
Congress did pass a law, in 1977, that gives the president powers to “deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.” (This law is called the International Emergency Economic Powers Act of 1977, or IEEPA.) Specifically, the president can “investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any acquisition, holding, withholding, use, transfer, withdrawal, transportation, importation or exportation of, or dealing in, or exercising any right, power, or privilege with respect to, or transactions involving, any property in which any foreign country or a national thereof has any interest by any person, or with respect to any property, subject to the jurisdiction of the United States.” That long list is usually abbreviated, in this context, to “regulate … importation”: The IEEPA allows the president to regulate imports in an emergency. If he can regulate imports, can he impose tariffs on them? Eh, maybe, sounds like a regulation.

And that is the legal theory behind Trump’s Liberation Day tariffs:
1) There is an “unusual and extraordinary threat” (trade deficits), so the president can declare that all US trade with every country is a national emergency.
2) In an emergency, he has the power to regulate imports.
3) He will regulate imports by imposing tariffs on them.

The specific words of the Constitution do not matter, because foreign trade is an emergency and the president must regulate it.
We discussed this theory the day after Liberation Day, and again the following week. I don’t love it! As I wrote in April:

The idea seems to be that every trade policy of every country in the world, over the past several decades, constitutes an “unusual and extraordinary threat.” This is a strange way to use words! How can every instance of trade with every country be unusual? How, after decades of trade deficits, is a trade deficit extraordinary?
It is also a strange way to use law. The US is in a perpetual state of emergency with respect to every country forever, allowing the president to use emergency powers to bypass the Constitution to impose tariffs.

We also discussed a doctrine of constitutional law called the “nondelegation doctrine,” which says that Congress cannot give up its constitutional legislative power to the executive. It can delegate some decisions to the executive, but only with an “intelligible principle” to guide the executive’s action. The executive can fill in the details of congressional legislation, but Congress can’t just tell the president “make any laws you want,” because the Constitution says that that’s Congress’s job.
And so, I wrote, there are two possibilities here:

1) The IEEPA doesn’t actually give the president the power to impose tariffs on every country just because he doesn’t like free trade. IEEPA powers are only for emergencies, and “international trade exists” can’t really be an unusual and extraordinary threat to the US.
2) If the IEEPA did give the president sweeping powers to impose tariffs, that would be unconstitutional.

This all struck me as obviously correct in principle, but I have become cynical about the Constitution actually controlling anyone’s actions here in 2025, so I called it “frankly pretty speculative” as a theory of actually stopping the tariffs. Still, worth a shot.
And here you go!

The bulk of President Donald Trump’s global tariffs were deemed illegal and blocked by the US trade court, dealing a major blow to a pillar of the Republican’s economic agenda.
A panel of three judges at the US Court of International Trade in Manhattan issued a ruling Wednesday siding with Democratic-led states and a group of small businesses that argued Trump had wrongfully invoked an emergency law to justify some of his levies.
The Trump administration filed a notice that it was appealing the ruling. The US Supreme Court may ultimately have the final say in the high-stakes case that could impact trillions of dollars in global trade. …
The order suspends the vast majority of Trump’s tariffs — his global flat tariff, elevated rates on China and others, and his fentanyl-related tariffs on China, Canada and Mexico are all suspended by the ruling. Other tariffs imposed under different powers, like so-called Section 232 and Section 301 levies, are unaffected, and include the tariffs on steel, aluminum and automobiles.

Here is the court’s opinion, which starts by laying out the issue pretty clearly:

The Constitution assigns Congress the exclusive powers to “lay and collect Taxes, Duties, Imposts and Excises,” and to “regulate Commerce with foreign Nations.” U.S. Const. art. I, § 8, cls. 1, 3. The question in the two cases before the court is whether the International Emergency Economic Powers Act of 1977 (“IEEPA”) delegates these powers to the President in the form of authority to impose unlimited tariffs on goods from nearly every country in the world. The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder.

Later the court uses the basic two-possibilities framework I laid out in April: Either IEEPA has no limits (and is therefore unconstitutional), or it has limits (so Trump can’t just impose whatever tariffs he wants on everyone):

Underlying the issues in this case is the notion that “the powers properly belonging to one of the departments ought not to be directly and completely administered by either of the other departments.” Federalist No. 48 (James Madison). Because of the Constitution’s express allocation of the tariff power to Congress, see U.S. Const. art. I, § 8, cl. 1, we do not read IEEPA to delegate an unbounded tariff authority to the President. We instead read IEEPA’s provisions to impose meaningful limits on any such authority it confers. Two are relevant here. First, § 1702’s delegation of a power to “regulate . . . importation,” read in light of its legislative history and Congress’s enactment of more narrow, non-emergency legislation, at the very least does not authorize the President to impose unbounded tariffs. The Worldwide and Retaliatory Tariffs lack any identifiable limits and thus fall outside the scope of § 1702. Second, IEEPA’s limited authorities may be exercised only to “deal with an unusual and extraordinary threat with respect to which a national emergency has been declared . . . and may not be exercised for any other purpose.” 50 U.S.C. § 1701(b) (emphasis added). As the Trafficking Tariffs do not meet that condition, they fall outside the scope of § 1701.

The court decides that “any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional”: To be a constitutional delegation of power, IEEPA has to impose some limits on the president’s powers to regulate trade. And “the President’s assertion of tariff-making authority in the instant case, unbounded as it is by any limitation in duration or scope, exceeds any tariff authority delegated to the President under IEEPA.”
Again, this all seems pretty obvious to me but, uh, what happens next? The government will appeal; I find this opinion convincing, but there is an audience for the argument that the president can do whatever he wants. (“The Supreme Court may again prefer Trump to precedent,” writes UBS’s Paul Donovan.) There are statutes other than IEEPA that allow the president to impose tariffs in more limited circumstances and with more procedures and findings; presumably the government will try those. “Nothing’s really changed,” said trade adviser Peter Navarro. But those statutes are a bit narrower. “Republicans in Congress have advanced legislation that would give the president wide authority to impose so-called reciprocal tariffs,” reports Bloomberg, “but concern about the impact of Trump’s widespread levies is expected to limit the appetite for moving that measure now.” For now, though, will the tariffs just … go away? Just because they’re illegal? Is that how this works?

The U.S. pioneered the combination of solar panels and batteries that makes it possible to get power from the sun when it isn’t shining. Now it risks being left behind thanks to a trade war and Republicans’ plan to withdraw clean-energy subsidies.
The tax bill passed by the House would phase out tax breaks for various green technologies, including energy storage facilities that use batteries to store power that gets released when the grid needs it. Grid batteries are also heavily exposed to tariffs because, unlike EV batteries, practically none are made in the U.S. They are made in China.
This double whammy casts a shadow over a technology that is doing the heavy lifting as U.S. power demand rises for the first time in a generation. Batteries will account for 29% of the power capacity installed this year, behind only solar, the Energy Information Administration says.
The Senate may prolong the tax credits, and Wednesday’s court ruling that voided—for now—many of Trump’s tariffs underscores the uncertainty over trade policy. For green-energy companies that typically line up customers before committing to projects, that uncertainty makes it harder to put a price on power: “We have never seen such a high demand for energy, but there’s no way we can move forward,” said David Ruiz de Andrés, chief executive of solar-plus-storage company Grenergy.
The Madrid-based company has ambitions to grow in the U.S., lured by tech companies vying to build power-hungry data centers, but currently it isn’t investing in projects besides a few already under way. Grenergy’s new $4 billion investment plan prioritizes Europe, its home market, and Latin America, where it recently signed a deal with Chile’s state-controlled copper-mining giant, Codelco, to provide round-the-clock power from vast solar and battery arrays.
Solar power, 24/7 is becoming feasible (in very sunny places like Chile, anyway) thanks to battery technology improvements from Chinese manufacturers such as BYD and CATL. Their race to squeeze more capacity into less space reduced grid batteries’ cost by 40% between 2023 and 2024, according to BloombergNEF.

Not doomed, but more expensive-
Low costs, and the sheer availability of solar panels and batteries, means U.S. growth would likely be slowed rather than halted by trade barriers and withdrawn subsidies, said BloombergNEF policy expert Ethan Zindler: “Some projects will get canceled, some will go forward and get priced higher,” he said.
There aren’t enough gas turbines, let alone nuclear plants, to meet U.S. power demand. As Zindler sees it, the question is how much potential demand is destroyed by higher prices—tech companies can build more data centers in other countries—and how much Americans pay for electricity.

” … probably be satisfied if Congress simply delegated their tariff power to the President.”
Perhaps initially. But there’s a larger issue of whether Congress can constitutionally delegate away to another branch of government an authority they are granted under the Constitution. Could Congress, for instance, delegate their Constitutional powers to impeach high officials or declare war to the executive branch? Could they delegated their power to levy and collect taxes to the judiciary?

The Supreme Court has sometimes declared categorically that the legislative power of Congress cannot be delegated,¹ and on other occasions has recognized more forthrightly, as Chief Justice Marshall did in 1825, that, although Congress may not delegate powers that are strictly and exclusively legislative, it may delegate powers which "[it] may rightfully exercise itself."

Justice Jackson [in his concurrence] divided presidential actions into three categories that looked at the extent to which the President was acting in concert with Congress. With regard to the first category, he stated:

When the President acts pursuant to an express or implied authorization of Congress, his authority is at its maximum, for it includes all that he possesses in his own right plus all that Congress can delegate. In these circumstances and in these only, may he be said . . . to personify the federal sovereignty.

Before 1917, Congress authorized loans for specific purposes; with enactment of the Second Liberty Bond Act* in 1917, Congress moved to authorize separate limits for different types of securities (as explored in this 1950s treatment of the transition). In 1939, Congress again altered how it delegated authority to Treasury, creating the first ceiling on most types of borrowing instruments.
Judging from the NY Times coverage of the 1917 episode, legislators paid little attention to the implications of mandating a ceiling. They focused instead on Treasury Secretary McAdoo’s request for a higher borrowing limit so as to fund an expensive war effort. The ceiling was created to empower, not rein in, Treasury (prompting a failed effort to create a congressional committee to oversee Treasury’s actions). Similarly, the creation of the aggregate ceiling in 1939 reflected congressional deference to Treasury, granting the department flexibility in refinancing short term notes with longer term bonds. As the Senate floor debate makes clear, senators viewed the move as removing a partition in the law that hampered Treasury’s ability to manage the debt.