“For every action, there is an equal and opposite reaction” – Newton’s 3rd Law
Japanese voters just handed power to a candidate whose campaign ads portrayed as the “iron shield” against American pressure, Chinese assertiveness, and a “deteriorating World Order“. The campaign’s focus: only muscular, unapologetic leadership could counter the Trump administration’s threats to trade allies and the capricious Geo-Political moves.
Tokyo’s ballot boxes echoed trends seen in Poland, Hungary, Argentina and the Philippines earlier in 2025 – places where, under the specter of external bullying (real or perceived), large blocs of the population turned toward leaders with strikingly assertive (and sometimes abrasive) styles.
This morning, after Japan’s watershed 2025 election, the world’s headlines struck a familiar chord: Another nation, long admired for its consensus-driven politics, has pivoted sharply toward a leader promising to defend National honor with uncompromising resolve. This isn’t an isolated turn. From Europe to Asia, recent elections have delivered fresh mandates to politicians who cast themselves as the only reliable bulwark against a shifting, more intimidating global order – an order where American unpredictability, crystallized in the shadow of a second Trump presidency, looms larger than ever.
The archetype remains remarkably consistent: Leaders who centralize power, undermine checks and balances, suppress dissent, and build personality cults often anchored in state media and relentless nationalism. The playbook that began with Putin and Xi’s break from their uncharismatic predecessors has been adopted and adapted from Ankara to Manila, and now, ever more openly, in Washington. The “Pax Autocratica” these leaders propagate is defined by confrontational rhetoric, weakening of International institutions and an unapologetic transactionalism in foreign policy.
“I sell the things you need to be
I’m the smiling face on your TV
Oh, I’m the cult of personality
I exploit you, still you love me
I tell you one and one makes three
Oh, I’m the cult of personality” – Living Color
What’s driving this global surge in strongman appeal? Political psychology offers clear clues:
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Threat Amplification: People are wired to prioritize security under threat. When foreign leaders act aggressively – whether via Tariffs, Military Posturing, or Inflammatory Rhetoric, populations become more open to “Defenders” who promise to hit back.
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Tribal Instinct: Social identity theory teaches that, in the face of external challenges, in-groups rally around figures who visibly oppose the out-group, fostering loyalty via displays of resolve.
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Distrust of Compromise: When the International climate is perceived as hostile, Compromise becomes synonymous with WEAKNESS. Voters gravitate to politicians who reject conciliation and instead embody the mythology of National Strength.
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The strongman cycle is not new. From the 1930s rise of “Man on Horseback” leaders to the late-Cold War elections have favored hawks over doves, International antagonists have long-bred domestic hard-liners. The difference today is in Scale and Simultaneity. Trump’s no-holds-barred politics on the world stage – breaking trade deals, browbeating allies, loudly celebrating winners and punishing perceived losers – has emboldened others to follow suit and nudged foreign electorates toward their own “Protectors.”
Poland and Hungary are doubling down on Authoritarian reforms, India is intensifying Majoritarian Nationalism, Latin America’s pivot back to “caudillo” figures after years of Technocrats. These leaders share similar hallmarks: Hyper-Nationalism, Disdain for Compromise and the promise of protection from external threats: Real OR Exaggerated!
That’s right, we used to protest this kind of behavior – that’s how we drove out these politicians 40 years ago – yet here we are again, building yet another Global Authoritarian Regime but this time they have installed their Big Brother Devices that we all willingly carry around (and pay for!), which deliver their lies and censor the news that reaches us (see also our article on Colbert this weekend). This time, dissent is not just discouraged – the very thought of it is being erased!
Donald Trump did not create the Strongman Era but his “America First” approach: dominance of headlines, readiness to attack allies and rivals and an active embrace of “Tough Guy” politics, have emboldened and legitimated similar tactics Globally. Trump’s willingness to sideline Liberal norms, challenge Democratic Institutions and dominate policy through force of personality, has sent a signal: Hard-charging strongmen could thrive, not only in Autocracies, but in the heartlands of Democracies as well.
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In Japan, recent elections were shaped by a desire for a government deemed capable of standing up to an unpredictable U.S. partner. The logic: only a robust, “tough” leader can safeguard their own national interests.
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European and Asian elections alike have seen moderate or conciliation-oriented candidates cast as “weak,” while those who project Strength, Nationalism and Readiness to Retaliate rise in popularity.
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In Greenland and Canada, for instance, center or center-left candidates who publicly opposed Trump’s direct interventions fared well, not because they were strident liberals, but because they embodied “protection” from perceived U.S. overreach.
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In some cases, the backlash benefits are indirect: Trump’s rise has not just empowered Conservative Strongmen abroad but it has also provided Left or Centrist candidates an opportunity to win by positioning themselves as fearless defenders of national identity and interest – regardless of their political stripe. That’s a trick the Liberals in this country need to learn – FAST!
In an environment where international relations are dominated by muscle-flexing and “deal-breaking,” compromise-oriented leaders struggle to capture the public’s confidence. They are seen as too conciliatory, or unable to stand up to international bullies. This shift in public mood from “we want cooperation” to “we need protection” is consistently documented in polling across Europe, Asia, and the Americas – from trade to military alliances.
The “Strongman Cycle” feeds on Nationalism, declining trust in our Institutions, Economic Uncertainty, and the amplification of divisive rhetoric through Social Media – the Big Brother devices you are probably reading this on right now. Trump’s prominence and direct actions – major Trade Wars, Military Threats/Actions, high-profile snubs of International AND Domestic Institutions, help transform these underlying anxieties into political momentum for hardline candidates Worldwide and, before we know it, we ARE surrounded by enemies – enemies WE created!
Trump’s methods both inspire and necessitate the rise of other Strongmen as nations rally around leaders who seem capable of “standing up” to him and safeguarding their own National Pride. At the same time the International climate created by this interplay makes Compromise, Diplomacy, and Moderate Leadership look less and less attractive – or even dangerously naïve – to worried electorates.
The pattern is evident in recent elections, policy shifts and the roster of World Leaders from Brazil to Hungary and Japan. Analysts, pollsters, and historians agree: We are living through the “Age of the Strongman” and U.S. politics – Trump above all – have dramatically influenced this trajectory.
Now, getting back to the markets: There is not a lot on the calendar ahead of next week’s Fed Meeting and, of course, the July 1st Tariff Deadline (again). Does Trump really, really mean it or will we all be singing “TACO, TACO Man!” yet again?
We do have Leading Economic Indicators this morning (10), Powell speaks tomorrow and Bowman later to kick off a heavy week of Bond Auctions (they are all heavy these days) and we have PMI Thursday and Durable Goods Friday and some Home Sales data throughout the week – kind of boring:
Much more importantly, we have an Earningspalooza this week with about a quarter (125) of the S&P 500 checking in and next week it’s more like 175, then back to 85 and we’re done – so enjoy the madness while you can:
It’s too early in the season to make earnings bets but after next week, we should have enough good data to make educated guesses on the rest. Banks were a slam-dunk last week but we don’t know if small banks did as well as their Big Brothers, who were able to lower their reserve requirements after acing the stress tests – because now they can classify crypto-currency as assets. Everything is connected.
And, by the way, Trump signed the “Genius Act” into law this morning. It sat on his desk since Friday but what kind of market impact would it have had if he signed it on the weekend? Signing it this morning gives us a whole other reason to rally and keeps the FREE MONEY rolling into the markets – just like God intended….
