By Michael O’Neill

When Donald Trump was stumping for votes during the 2015–16 election, he repeatedly touted his business success. “I’m a really smart guy. I’m very successful. I built a great company,” he said. On another occasion, he declared, “I’m the most successful person ever to run for the presidency, by far. Nobody’s ever been more successful than me.”

The facts tell a different story. Donald Trump, the self-proclaimed “very successful businessman,” managed to bankrupt five casinos between 1991 and 2009 — including the Trump Taj Mahal, Trump Plaza, and Trump Castle — a feat so staggering that even the most corrupt mobsters in Las Vegas managed to avoid it. It takes a rare blend of ego, delusion, and financial mismanagement to turn a cash-printing business into a money pit. Bugsy Siegel helped launch modern Vegas with bullets and blackjack, and the house always won. But Trump’s casino empire, bloated with junk debt and built on branding over basics, collapsed under its own weight. He walked away with his name intact and licensing fees in his pocket, while investors, employees, and bondholders were left holding the bag to the tune of a very conservative estimate of $5.0 billion.

The Art of the Downgrade
Trump’s plan to Make America Great Again comes at a cost — an increase in the federal deficit between $3.3 trillion and $5.3 trillion over 10 years, which is a debt-to-GDP ratio of 124.3%. Moody’s Ratings, the premier rating agency for sovereign debt, was not impressed. They downgraded U.S. long-term issuer and senior unsecured ratings to Aa1 from Aaa. Moody’s said the decision is the result of a succession of U.S. governments (Democrat and Republican) increasing “government debt and interest payment ratio to levels that are significantly higher than similarly rated sovereigns.”

Canadians Should Be Worried
Meanwhile, north of the border, Mark Carney has fully evolved from conservative central banker to deficit-friendly Prime Minister peddling ambitious spending plans. Former Finance Minister Chrystia Freeland’s fiscal anchors proved to be helium-filled fiscal balloons, but Mr. Carney’s $225 billion new spending initiative is a methalox-fueled missile.

Fitch Ratings has taken note of Mr. Carney’s plans and warned the increased spending could jeopardize Canada’s AAA status. The agency highlighted that such expansive fiscal measures, without corresponding revenue increases or spending cuts elsewhere, might lead to a deterioration in Canada’s debt metrics.

Sure, Canada’s debt-to-GDP ratio is lower than that of the U.S., but the Canadian dollar is not a reserve currency. That means Canada doesn’t enjoy the same global demand for its bonds or the luxury of borrowing indefinitely without consequence. As interest rates rise and debt-servicing costs climb, Canada will be more exposed to market scrutiny. Investors will demand higher yields, credit agencies will sharpen their pencils, and Ottawa’s room to maneuver will shrink. If confidence falters, a downgrade becomes not just possible — but probable.

Lots of Deal Talk — Little Deal Action
President Trump claimed to have negotiated 200 trade deals in an April 25 Time Magazine interview, but the reality is that only one deal was done, and that was with the UK — and that was on May 20. It was probably the easiest one as well. The British have a thousand-year history of bowing and scraping to nobility, and UK Prime Minister Keir Starmer demonstrated that with aplomb when he “bent the knee“ to Trump. Mr. Starmer was given a 400% increase on the tariff for UK cars imported into America (from 2.5% to 10%) and a 10% tariff on all other UK goods. In return, Trump received an invitation to dine with King Charles.

Prices Are Going Higher
Walmart fired a warning shot last week, saying Trump’s scaled-back tariffs on Chinese goods — still a hefty 30% — will force price hikes on everything from clothing to car seats. President Trump, never one to shy away from retail micromanagement, promptly dismissed the concern, insisting Walmart should “eat the tariffs.”

But Fed officials aren’t buying the spin. Atlanta Fed President Raphael Bostic said many businesses had buffered earlier tariffs by front-loading inventory — but those strategies are “running their course.” With that buffer gone, price hikes are now expected to filter through. Cleveland Fed President Beth Hammack and San Francisco’s Mary Daly echoed a common theme: wait, watch, and don’t overreact — yet. St. Louis Fed’s Alberto Musalem warned the real danger is underestimating the inflation ripple effect. Tariffs may look like one-offs, but their second-round effects could be more toxic — especially if inflation expectations start to harden.

Beware of Falling Rocks

Six Bankruptcies and a Country Downgrade isn’t just a political headline — it’s a flashing warning for financial and FX markets. Soaring U.S. deficits, a Moody’s downgrade, and tariff-driven inflation risks are rattling bond investors and could weigh on the U.S. dollar in the near term. In Canada, Carney’s $225 billion spending plan has Fitch watching, adding pressure to Canadian yields and the loonie. With both countries ignoring fiscal orthodoxy, FX markets are left navigating rising rates, weakening credit profiles, and mounting inflation uncertainty. Volatility may soon be back with a vengeance and traders will be pricing in risk, not rhetoric.