(Don’t Fear) the Reaper

How the age of the deal made chaos look investable.

 

“I gave up caring about anything and all my problems disappeared”.

(Friedrich Nietzsche)

 

“I’ve been studying this now for three years. I’ve read 25 books on it”.

(Jared Kushner)

 

“I don't like violence, Tom. I'm a businessman; blood is a big expense”.

(Virgil Solozzo in ‘The Godfather’)

 

 

Back in February, I published a “Long Read” titled “It’s the end of the world as we know it (and markets feel fine)” (https://www.econopolis.be/en/blog/posts/2025/february/it-s-the-end-of-the-world-as-we-know-it-and-markets-feel-fine/), discussing geopolitics and financial markets. The comparison then was to the collapse of the nineteenth-century “Concert of Europe” after Crimea: the world at an inflection point, again. I speculated that Donald Trump could either be a 21st-century Bismarck—redrawing the map through deals, bargaining, and a healthy disregard for ideology—or he could end up like Napoleon III, chasing short-term political theatre while pushing his enemies into each other’s arms. At the time, I leaned Bismarckian and argued that in this scenario the long-term geopolitical risk premium  in financial markets would start dissipating, including for European and Chinese stocks. After eight months in which – to paraphrase Lenin - decades happened, it is time to take stock.

 

The Middle East—peace as a real estate deal

Starting with Donald Trump’s geopolitical track record, what stands out is his progress in bringing peace to the the Middle East, home to a long and intractible conflict that often brings to mind Lord Palmerston’s description of the Schlewig-Holstein question: “Only three people have ever understood it: one is dead. The second is in a lunatic asylum. The third is me, but I’ve forgotten it”. Amidst the quagmire of October 7th and it’s aftermath, Trump, aided by his son-in-law Jared Kushner, erstwhile property developer Stephen Witkoff and an improbably rehabilitated Tony Blair, did the impossible (see https://www.newstatesman.com/international-politics/geopolitics/2025/10/jonathan-powell-and-tony-blair-at-the-court-of-donald-trump for a great relay). Mere weeks after telling Benjamin Netanyahu to “stop being so fucking negative”, Trump brokered a two-state solution financed by the Gulf states, secured by Arab forces, and implemented under American coordination. Whether it holds is uncertain. But for now, as long-time critic of U.S. foreign policy Steve Bannon put it, “the era of endless war is over.”

 

Russia—when dealmaking hits metaphysics

Expectations are now rising that, if quiet can hold in Gaza, it may extend eastward. The modus operandi is the same:  to freeze a war by treating it as a contract dispute. As Trump recounts: “I set up a meeting for Steve Witkoff with President Putin, thinking it’d be a 15-20 minute meeting. Steve had no idea about Russia, or Putin too much, or politics … after 30 minutes I called. Still with Putin. Three hours: still with Putin … after five hours he finally came out”. However, the lack of tangible progress towards peace underlines the limitations of a transactional worldview, when confronted with the milennarian beliefs of a self-proclaimed civilisational state. With the conflict essentially frozen thanks to Western re-armament of Ukraine, and (Chinese supported) Russian supply-chain and economic resilience, a peace deal appears unlikely in the short-run. Nonetheless, the administration’s two-pronged policy of supporting Ukraine through a re-invigorated NATO alliance, and his cajoling of both sides to seek an agreement, may yet yield unexpected breakthroughs.

 

China – managed divorce

With China, the U.S. administration has turned rivalry into a kind of permanent negotiation. The Cold War analogy never fit; this is more like a managed divorce—something the thrice-married president understands intuitively. Tariffs, tech bans, and investment curbs are not instruments of isolation but calibration: forcing Beijing to price in U.S. interests without the pretense of shared ideals. Trump saw what most “China hawks” wouldn’t admit—that decoupling is impossible, but dependency without leverage is suicide. Friction, not friendship, becomes equilibrium.

 

Bismarck or Napoleon III?

At first glance, Trump’s theatrics and short attention span make him resemble Napoleon III, the hapless “Sphinx of the Tuileries” who failed to achieve his strategic objectives and drove his enemies together. Yet his modus operandi and record so far feel closer to Bismarck’s. Ditching universalist principles and multilateral institutions, this administration has chosen to remake the world through a series of deals and alliances, relying on pragmatism and backed by hard power. Much could go wrong, and it remains to be seen whether the capricious Trump, like Bismarck, will be able to build a system that outlives him. Nonetheless we now unmistakably live in a world where, as Freddy Gay puts it in the latest issue of the New Statesman: “…leaders court the president’s favour to receive his patronage and avoid his wrath. Institutions such as the United Nations are ignored. Diplomacy is personal. Job titles matter less than getting things done. Raw power dominates international law. And protecting capital takes precedence over protecting human rights. It is a world of force, money and connections, and Trump bestrides it all.”

 

The death of managerialism

This year’s chaotic timeline, dominated by Donald Trump’s mercurial behaviour, has led to much soul searching and handwringing by the commentariat – market pundits, journalists, and academics alike. At times, they have resembled the old bourgeois order in a Chekov play, shuffling around in melancholy. One of the central tenets of the “managerialism” that had come to dominate Western policymaking over the past three decades is that the world is a complex system that needs to be analysed and risk-managed. Trump’s unsettling genius is in showing that this may in fact be a collective delusion.

First, by publicly aknowledging that the neoconservative consensus and the so-called “rules-based order” were not only a  foreign policy and an economic, but also a moral failure - a fact already long obvious to the non-Western world.

Second, by proving that the post-liberal world can function, even prosper, without bureaucratic oversight or a moral narrative.

And third by simply doing things—ignoring process, precedent, and protocol—and discovering that action itself has power.

 

Markets feel fine

Writing in February, I wagered that as a result of a new energy inserted into international relations by the Trump administration, the “geopolitical risk premium” in equities would disappear, with especially international (non-US) markets performing well. Despite the post-liberation-day panic, six months later, this thesis has held up well, as Global Equities have posted strong YTD gains, and Europe and Emerging Markets have outperformed the US. Equity volatility, meanwhile, has fallen to historic lows. And so it is that, just like there is an increasing discrepancy between what is reported in the press and what people can witness in the world, there is a growing gap between the news cycle and financial markets’ behaviour. The most obvious reason for this is that, independent of geopolitics, corporate earnings and corporate capex, especially in the Technology sector, have positively surprised compared to expectations. But perhaps the more important underlying reason  the markets have remained serene is that the new world we live in runs on their logic – one set by capital flows, foreign direct investment, private dealmaking, energy security, and digital dominance.

 

The deal guys vs the idealists

Jared Kushner once observed that the people who had previously tried to negotiate peace in the Middle East were “history professors… or diplomats”. He was something else, he noted. “It’s just different being ‘deal guys’,” as he put it. “[It’s] just a different sport.” As it stands, graduates of the Kennedy School of Government at Harvard have been eclipsed by property developers who, paraphrasing Kushner, skim a few books and close the deal. And maybe this is something to be applauded. In one of his lectures at the Esalen Institute in California, the Taoist and countercultural hero Alan Watts recounts a terrible argument with leftwing activist and author Margaret Mead. Holding forth on the absolute horror of the atomic bomb, and how everybody should spring into action and abolish it, she was getting so furious about it that Watts said to her: "You scare me because I think you are the kind of person who will push the button in order to get rid of the other people who were going to push it first." He goes on to argue that idealists who want to put the world to rights, often end up making terrible messes. And so it is that Western policymakers, hiding behind slogans such as nation-building or “making the world safe for democracy”, have in past decades further aggravated an already unstable world. The deal guys, cynical as they are, have at last abandoned the illusion that virtue guarantees wisdom. Like Taoists, they negotiate with what exists, not with what should. In that sense they are, inadvertently, the pragmatists of our era: impatient, morally unconvincing, but sometimes frighteningly effective.

 

Risk and the new aristocracy

Markets, as usual, sensed the shift before the pundits did. While analysts were busy calling forecasting higher risk premiums in asset markets in the face of more unpredictable and less “rules-based” policymaking (whatever that means), investors have recognised that there is money to be made. The dismantling of the post-war liberal order has spawned bull markets everywhere: European defence stocks, Chinese Technology companies,  AI infrastructuture plays, Gold,  Crypto, Middle Eastern equities or in Rare Earth miners. Retail traders, as ever, arrived first—intuitively grasping that volatility is just another form of opportunity—while institutions followed, claiming foresight.

Those still attached to the certainties of the old world, tempted, as Céline wrote, to “draw the blinds and listen to Beethoven,” forget that markets reward nerve, not nostalgia. The chaos of this age is not a bug but a feature: power, profit, and attention all migrate to the agile. Risk-taking, far from reckless, has become a form of adaptation.

And what world it is. The great late political satirist PJ O’Rourke once quipped that he  “would Rather Be Governed By the First 2,000 People in the Telephone Directory than by the Harvard University Faculty”. As it stands, we better get used to the being run by the first 100 people in the Forbes World Billionaires’ List.