MAD Macro - Trump, Elon and Powell
Mr. Too Late, You’re Too Late Again
Elon, Please Have This Fake Key to the White House
Trump might be right that Powell will be too late again. Yesterday, the ISM Services Index and the ADP employment change surprised on the downside. Trump’s frenetic pace of change might finally be taking a toll on U.S. economic growth. Trump tariff razzle-dazzle is slowing global trade. The BBB is both pro-growth, pro-deficits and at risk of not passing. Trump keeps harassing Powell to cut interest rates and now he might actually be correct, the Fed should cut rates.
Trump gave Elon a golden key to the White House last week. Today he is having the locks changed. Elon has lots of children who will be very rich and he does not want them stuck paying for the U.S. debt problem. In fact, that is the tragedy of the commons. We are leaving our children with a monster debt problem. The U.S. debt problem is like the Titanic headed for an iceberg. The iceberg is getting closer and we need to change course soon before it’s too late. The Senate leaders met with Trump yesterday and it sounds like they did not solve any problems. All of the little adjustments the Senate is likely to make to the BBB might be like rearranging the deck chairs on the Titanic. A little less SALT won’t change the big picture. It’s the economy stupid. The WSJ editorial board has a good article on the CBO’s scoring of the BBB, linked here. It’s titled, “A $4.5 Trillion Tax Increase, or Not?” They make the argument that the BBB might not be beautiful but if it does not pass, the economy will tank and the Titanic will hit the iceberg. Speaking of the iceberg, Ray Dalio has a new book out titled, “How Countries Go Broke: The Big Cycle”. He was on CNBC hawking the book yesterday. Funny, it’s like his other books with a new title. Ray looked a little gaunt, like Ebenezer Scrooge meeting the ghost of Christmas future. Or maybe he is on the fat shot.
In other news, Trump the peace maker is have trouble making peace. The WSJ Editorial Board has a good article today on Trump’s problems trying to make peace with Iran and Russia, linked here. It’s titled, “Will Trump Take ‘No’ for an Answer?” Trump spoke with Pootie yesterday for 75 minutes. You wonder what the hell do they talk about for 75 minutes. The only news from the call was that Pootie is going to hit Ukraine hard for their successful bombing of Russia’s bombers.
Markets are mixed overnight. Gold and copper are sharply higher this morning. The wild fires in Canada are forcing shutdowns of several gold and copper mining operations. Copper is back above $5. Today the ECB is expected to cut interest rates. Trump likes the ECB. We get the weekly jobless claims and the Challenger job cut numbers this morning. Tomorrow the important monthly employment report, unenjoyment Friday.
I updated the U.S. Dollar Index, U.S. 10yr yield, U.S. 10yr-2yr yield spread, WTI crude oil, NY copper, spot gold, NYSE Arca Gold Miners Index, bitcoin, Strategy, S&P futures, NASDAQ 99 futures and DOW futures charts below.
The dollar and interest rates are a little lower.
Crude oil is a little higher. Copper and gold are sharply higher. The NYSE Arca Gold Miners Index should open higher with gold prices. Bitcoin is unchanged and Strategy is also due to open unchanged.
S&P, NASDAQ 99 and DOW futures are all close to unchanged.
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