Tuesday Night Links

• Washington said Wednesday that, as of next week, it would impose a 25% tariff on some 3,000 goods from Brazil. It is the first country hit with duties under the Trump administration’s new strategy of using Section 301 of U.S. trade law to punish alleged unfair trade practices. Among a host of grievances, including anticorruption enforcement and barriers to U.S. ethanol imports, Washington argues that PIX has become so ubiquitous in Brazil it unfairly disadvantages U.S. payment companies such as Visa and Mastercard. There is also growing concern in Washington that Brazil and other countries are seeking to reduce their dependence on the dollar. [WSJ]
• Shortly before my guest arrives for lunch, I realise that our chosen Greek taverna does not serve alcohol. Not only that, the waiter has no idea where I might buy a bottle of wine. On a scorching summer’s day in central Philadelphia I head down a few sultry streets on what is not, it transpires, the easiest mission. The only options are a Moldovan Pinot Grigio or a Portuguese Vinho Verde. I return with a bottle of the latter on the grounds that a taste of southern Europe is more fitting for a latter-day Homeric feast. Emily Wilson, the acclaimed translator of Homer’s epics, is seated beneath a painting of a sleepy Aegean harbour. She had picked the little family-run Kanella restaurant, with its blue-and-white awnings, as the nearest she could get to my proposal we meet on a Mediterranean island on Odysseus’s star-crossed journey. [FT] 
• As a new separate entity, Mobility Global will likely be a good business to hold on to as it has many trusted products (CARFAX, Polk, Automotive Mastermind, and Market Scan) that are deeply embedded in the automotive ecosystem. MBGL’s customers span from nearly every global auto OEM and tier 1 supplier to thousands of car dealers. With annual revenues of just $1.75 billion, high margins, >80% subscription-based revenues, and now with greater flexibility to invest and acquire, MBGL management believes it can continue to grow at a high single-digit rate and expand margins. [Douglas Ott]
• This might be a long war. If it is a long war the United States should try to win it. The prerequisite for winning it is similar to what would be needed to win a war against China: complete military reform, drone manufacturing capacity, energy resilience. Let's go. Again the right way to fight this if it is a big war, is to have it politically "pay" for all the difficult reforms the U.S. needs to do anyway! The strongest EV argument is that gas prices at the pump don't matter anymore politically. The best argument for drones, is that they're more cost effective than tanks or jet fighters. The best argument for building both ourselves is so we're not vulnerable to supply chain attacks. etc. Unfortunate update: There is for now still almost no recognition in the military that this method of war won't work on a peer adversary and is extremely expensive. Little recognition that China will wage war in a way similar to Iran but greater scale. [Samo Burja]
• The last time electricity use grew five percent annually or faster was between the 1950s and 1970s, during the adoption of air conditioning, refrigerators, dishwashers, and washing machines. From 2005 to 2023, electricity use was almost completely flat. But as that lull in growth comes to an end, the grid will have to adapt. [Works in Progress]
• Goodspeed shows that British and American expansions do not resemble Dorian Gray, looking beautiful but hiding an inevitable accumulation of malinvestments (objectively bad investments that are destined to fail) and distorted decisions (mistaken economic decisions taken on the basis of bad regulation or flawed prices) that make a correction inevitable. If they did so, he argues, one would expect that as expansions get longer they get more and more likely to end. In his data, however, the relationship between the age of an expansion and the probability of death is essentially zero. Nor do measures of increased investment during the boom correlate with the severity of a downturn. Nor do longer expansions have longer recessions after them. This is why recessions remain essentially unpredictable. Any perceived regularity is likely to be a statistical illusion. Goodspeed shows that attempts to forecast recessions such as inversions of the yield curve (where long-dated government bonds have lower interest rates than short-dated ones) or the Sahm rule (which says a recession is likely underway if the unemployment rate spikes high above its recent lows for three months) are overfitted to US data and don’t work for the UK. [Works in Progress]