This didn't age well, did it? The Market doesn't believe Trump will do any of the crazy shit he says he will do. They don't fear Musk, because deep down, they'd all like to be Musk. Plus, they know Musk has skin in the Market himself, and they think he'll avoid tanking it. Beyond that, they just don't care. They think they will be immune from the worst of Trump. He's out to get "those" people, not me.
That's the problem with his support. About half of it is pure, unadulterated cult worship. They think he's an infallible god. The rest is riding along because there is nowhere else to go (Democrats sure aren't an option, and the GOP Establishment has been driven underground), and they are convinced that Trump isn't out to hurt people like them. I think they may be right, but sometimes benign intent has unintended consequences.
There is a larger danger that the markets will not factor in because it is outside their thinking. The American dollar is the premier currency used around the world for transactions both legal and illegal - right up until it isn't.
As Trump noticed (mainly because of the look of it happening during his occupation of the White House), the currently termed axis of evil are making moves away from the dollar, and taking a number of African and other countries in that direction. On top of that, the Orange buffoon's love of making enemies out of friends, and the worldwide dislike of your Fuehrer Musk, might mean it won't take too much to get the rest of the world thinking along the same lines - especially if the dollar starts to drop once China stops using it as a benchmark.
Of course some will think that is an impossible scenario, kind of like the scenario of Americans electing a felon convicted of fraud multiple times lol. As impossible as having an unelected, unaccountable billionaire who is not employed by the government of the U.S.A having complete control of your financial system and the federal workforce, and at the same time installing his own software on every government computer on the network.
Well done America, you can be as proud of yourselves as Putin and Xie are #insert multiple expletives here#
One of your best thought pieces, JVL. Also found the At War with Americans piece a helpful thought exercise. A thought on business investments and a thought on national security:
A thought on foreign investment: Starting with market reaction in short term makes sense but I'm interested in tracking how the ...ummm.. loss of predictable rule of law impacts foreign investment. If you have suggestions on good sources let us know. The regime is stating that it is trying to drive business here. Counter that assertion with a middle aged Musk access to private data, laws being ignored, and tax cuts not yet in the books, how can capital intensive businesses plan for 2028 and beyond?
SECOND I fear the Treasury access, even if read only, also jeopardizes our national security. What if some of our intelligence network utilizes organizations like USAid to get on the ground in some of our more difficult locations? Will access to the payment system lead to unmasking of undercover assignees? I don't trust Musk any more than Trump or Gabbard to keep information from Putin or Xi. I hope my concern is unfounded.
So I guess markets don't care at this point and by extension, we don't care. Many Americans own equities and bonds either directly or indirectly through 401(k)s or other investments. Both individuals and institutional investors are not selling and moving money to cash. It is either a wait and see or don't care enough to upend their portfolios over Trump's actions. Will there be a tipping point? Maybe. But as of now, it appears we are a long way from it.
I know a little bit about the ACH. I spent 9 years with the Federal Reserve, which operates FedACH, the federal part of the ACH, and then 26 with the Clearing House Payments Co., which is owned by a group of banks and operates the private-sector ACH. When I retired, I was deputy general counsel. I also spent time as a member of the rules and operations committee of the National Automated Clearing House Association (“NACHA”), a broader group that makes the rules for the ACH, that both the Fed and the Clearing House have adopted to govern their systems.
The ACH is extremely important. A lot of government payments (Social Security, Medicare reimbursements, grants, etc.) are made by ACH. So are private-sector payments like payroll. So your salary gets paid by ACH, and if you’re retired, your pension and Social Security will come through the ACH. The ACH also has a debit function so that if you allow your mortgage, utility bills, or insurance premiums to be paid by direct debit, those payments will be made by ACH as welL
The ACH is not to be confused with the large value funds-transfer systems Fedwire (run by the Federal Reserve) and CHIPS (run by the Clearing House), which are used for important payments that must be made immediately. The total amount handled by these systems dwarfs the ACH. (When I retired 10 years ago, CHPS transferred about $2 trillion every day, and Fedwire handled about twice that.)
From what I’ve read, Musk hasn’t had any access to these systems. Although the papers are vague about what exactly Musk has gotten his hands on, it seems that he’s taken over Treasury’s fiscal service, the unit within Treasury that actually makes government payments. Under the Federal Reserve Act, the Fed acts as fiscal agent of the Treasury, i.e. as the government’s banker (it holds the government’s checking accounts and sends and receives payments on behalf of the government and also acts as the government’s broker (selling all those debt instruments that the government needs to make up the deficits). So, when the government needs to make a payment, the fiscal service sends the payment order to the Fed, which debits the Treasury’s account and uses FedACH or Fedwire to make the payment. So what Musk controls is the process of sending instructions to the Fed. Thus far he (and Trump for that matter) haven’t taken control of the Fed.
This is very bad, but it would be a lot more difficult and create a lot more opposition if he tried to take over the Fed’s payment systems.
You couldn’t know at the time JV but the Orange Bully’s “suspension” of the tariffs yesterday was right out of the dictator’s playbook, a public relations ploy. We were played…again. No matter what Canada or Mexico did, Bully could look strong and declare victory. I’m so disappointed. I was hoping for inflation to come roaring back and cause pain at the pump for MAGAts.
I suspect you're right that "the markets" don't yet grasp the full threat. Encouraging them to keep blinders on, will be some temporary (or permanent) reprieves such as today's "deals" on tariffs (which is actually Trump backing down & calling it victory). Here - from Meidas Touch Network, is a nice summary of the BS tariffs drama >>>>>
So lets recap:
- Trump announces tariffs.
- Allies turn against the U.S., launch boycotts on U.S. products and boo us at events.
- Markets nosedive.
- Trump caves.
The "deals":
- Mexico agrees to do the same things they always do at the border to help the U.S. (including under Biden)
—but ALSO get Trump to agree to work to stop weapons trafficking from the U.S.-Mexico.
- Trudeau agrees to do the same things they always do to help the U.S., but also says he'll name a 'fentanyl czar'
(despite the fact that barely any fentanyl at all comes from Canada to the U.S.)
Of course Trump folded. But that's not the story the MAGAs believe. They think Canada and Mexico caved to Trump and he is the tough guy who finally brought them to heel. They think Trump is 'winning.'
Yes... as Sarah found in her focus groups, "finally a politician who is doing something." Even though instead of draining the swamp it's (literally) draining the reservoir.
It's not just MAGAs. We are a population of excitement addicts who have spent so much time playing video games and filling every moment of the day with "content" (said "content" being the exact opposite of what the word formerly meant) that it can no longer distinguish entertainment from information.
A nation that knows not its annals lives in darkness... but we have long since passed beyond that condition. When your head is implanted in your alimentary canal, you can't even see light at all.
I keep thinking about all the Secret Service data and devices that were destroyed right after 1/6. We never heard more about it. The Director was allowed to retire. His buddy who was in the unusual Secret Service/WH political role also got to retire.
This isn’t the first time our systems have been dramatically damaged from within.
Lawrence O'Donnell is on now. And he is laying it all out. Elon is a private citizen who has decided to take over the government, and Rs are rolling over. I am convinced that he has, in addition to the financial information he stole, thick files on every single R in congress, and he's blackmailing them to roll over and play dead. Most of Congress isn't stupid. If they know how awful, how unlawful, how insane what Elon is doing, then they're deliberately doing it.
Unexpected consequences. I represent one of the last American apparel manufacturers. They do a disproportionate amount of business with Canadian specialty store retailers. This morning, most of these Canadian women's apparel stores cancelled their Spring orders. That jeopardizes the future of this 30 year old company (and American jobs from NC to CA). No manufacturer can afford to absorb such a financial hit. Will the business be re-instated by the suspension of tariffs? Unlike automotive parts, the Made in America factor is not hidden inside. We will bear the anti-American backlash for now and who knows how long. If the company continues
I'm so sorry you and so many others are going thru this. Except the T voters: I'm not sorry for them. I don't think there's anything else that will get thru to them.
This didn't age well, did it? The Market doesn't believe Trump will do any of the crazy shit he says he will do. They don't fear Musk, because deep down, they'd all like to be Musk. Plus, they know Musk has skin in the Market himself, and they think he'll avoid tanking it. Beyond that, they just don't care. They think they will be immune from the worst of Trump. He's out to get "those" people, not me.
That's the problem with his support. About half of it is pure, unadulterated cult worship. They think he's an infallible god. The rest is riding along because there is nowhere else to go (Democrats sure aren't an option, and the GOP Establishment has been driven underground), and they are convinced that Trump isn't out to hurt people like them. I think they may be right, but sometimes benign intent has unintended consequences.
If you are right, guess who he will blame? Biden
You could be right! Hadn't thought of that
There is a larger danger that the markets will not factor in because it is outside their thinking. The American dollar is the premier currency used around the world for transactions both legal and illegal - right up until it isn't.
As Trump noticed (mainly because of the look of it happening during his occupation of the White House), the currently termed axis of evil are making moves away from the dollar, and taking a number of African and other countries in that direction. On top of that, the Orange buffoon's love of making enemies out of friends, and the worldwide dislike of your Fuehrer Musk, might mean it won't take too much to get the rest of the world thinking along the same lines - especially if the dollar starts to drop once China stops using it as a benchmark.
Of course some will think that is an impossible scenario, kind of like the scenario of Americans electing a felon convicted of fraud multiple times lol. As impossible as having an unelected, unaccountable billionaire who is not employed by the government of the U.S.A having complete control of your financial system and the federal workforce, and at the same time installing his own software on every government computer on the network.
Well done America, you can be as proud of yourselves as Putin and Xie are #insert multiple expletives here#
One of your best thought pieces, JVL. Also found the At War with Americans piece a helpful thought exercise. A thought on business investments and a thought on national security:
A thought on foreign investment: Starting with market reaction in short term makes sense but I'm interested in tracking how the ...ummm.. loss of predictable rule of law impacts foreign investment. If you have suggestions on good sources let us know. The regime is stating that it is trying to drive business here. Counter that assertion with a middle aged Musk access to private data, laws being ignored, and tax cuts not yet in the books, how can capital intensive businesses plan for 2028 and beyond?
SECOND I fear the Treasury access, even if read only, also jeopardizes our national security. What if some of our intelligence network utilizes organizations like USAid to get on the ground in some of our more difficult locations? Will access to the payment system lead to unmasking of undercover assignees? I don't trust Musk any more than Trump or Gabbard to keep information from Putin or Xi. I hope my concern is unfounded.
So I guess markets don't care at this point and by extension, we don't care. Many Americans own equities and bonds either directly or indirectly through 401(k)s or other investments. Both individuals and institutional investors are not selling and moving money to cash. It is either a wait and see or don't care enough to upend their portfolios over Trump's actions. Will there be a tipping point? Maybe. But as of now, it appears we are a long way from it.
There was a brief drop yesterday and a recovery, more or less, because Trump backed down. Wasn't that predictable? Didn't we see this show before?
I know a little bit about the ACH. I spent 9 years with the Federal Reserve, which operates FedACH, the federal part of the ACH, and then 26 with the Clearing House Payments Co., which is owned by a group of banks and operates the private-sector ACH. When I retired, I was deputy general counsel. I also spent time as a member of the rules and operations committee of the National Automated Clearing House Association (“NACHA”), a broader group that makes the rules for the ACH, that both the Fed and the Clearing House have adopted to govern their systems.
The ACH is extremely important. A lot of government payments (Social Security, Medicare reimbursements, grants, etc.) are made by ACH. So are private-sector payments like payroll. So your salary gets paid by ACH, and if you’re retired, your pension and Social Security will come through the ACH. The ACH also has a debit function so that if you allow your mortgage, utility bills, or insurance premiums to be paid by direct debit, those payments will be made by ACH as welL
The ACH is not to be confused with the large value funds-transfer systems Fedwire (run by the Federal Reserve) and CHIPS (run by the Clearing House), which are used for important payments that must be made immediately. The total amount handled by these systems dwarfs the ACH. (When I retired 10 years ago, CHPS transferred about $2 trillion every day, and Fedwire handled about twice that.)
From what I’ve read, Musk hasn’t had any access to these systems. Although the papers are vague about what exactly Musk has gotten his hands on, it seems that he’s taken over Treasury’s fiscal service, the unit within Treasury that actually makes government payments. Under the Federal Reserve Act, the Fed acts as fiscal agent of the Treasury, i.e. as the government’s banker (it holds the government’s checking accounts and sends and receives payments on behalf of the government and also acts as the government’s broker (selling all those debt instruments that the government needs to make up the deficits). So, when the government needs to make a payment, the fiscal service sends the payment order to the Fed, which debits the Treasury’s account and uses FedACH or Fedwire to make the payment. So what Musk controls is the process of sending instructions to the Fed. Thus far he (and Trump for that matter) haven’t taken control of the Fed.
This is very bad, but it would be a lot more difficult and create a lot more opposition if he tried to take over the Fed’s payment systems.
You couldn’t know at the time JV but the Orange Bully’s “suspension” of the tariffs yesterday was right out of the dictator’s playbook, a public relations ploy. We were played…again. No matter what Canada or Mexico did, Bully could look strong and declare victory. I’m so disappointed. I was hoping for inflation to come roaring back and cause pain at the pump for MAGAts.
JVL, have you seen this? https://youtu.be/5RpPTRcz1no?feature=shared
It’s wild but eerily accurate.
Excellent column, JVL.
I suspect you're right that "the markets" don't yet grasp the full threat. Encouraging them to keep blinders on, will be some temporary (or permanent) reprieves such as today's "deals" on tariffs (which is actually Trump backing down & calling it victory). Here - from Meidas Touch Network, is a nice summary of the BS tariffs drama >>>>>
So lets recap:
- Trump announces tariffs.
- Allies turn against the U.S., launch boycotts on U.S. products and boo us at events.
- Markets nosedive.
- Trump caves.
The "deals":
- Mexico agrees to do the same things they always do at the border to help the U.S. (including under Biden)
—but ALSO get Trump to agree to work to stop weapons trafficking from the U.S.-Mexico.
- Trudeau agrees to do the same things they always do to help the U.S., but also says he'll name a 'fentanyl czar'
(despite the fact that barely any fentanyl at all comes from Canada to the U.S.)
Of course Trump folded. But that's not the story the MAGAs believe. They think Canada and Mexico caved to Trump and he is the tough guy who finally brought them to heel. They think Trump is 'winning.'
Yes... as Sarah found in her focus groups, "finally a politician who is doing something." Even though instead of draining the swamp it's (literally) draining the reservoir.
It's not just MAGAs. We are a population of excitement addicts who have spent so much time playing video games and filling every moment of the day with "content" (said "content" being the exact opposite of what the word formerly meant) that it can no longer distinguish entertainment from information.
A nation that knows not its annals lives in darkness... but we have long since passed beyond that condition. When your head is implanted in your alimentary canal, you can't even see light at all.
I keep thinking about all the Secret Service data and devices that were destroyed right after 1/6. We never heard more about it. The Director was allowed to retire. His buddy who was in the unusual Secret Service/WH political role also got to retire.
This isn’t the first time our systems have been dramatically damaged from within.
Lawrence O'Donnell is on now. And he is laying it all out. Elon is a private citizen who has decided to take over the government, and Rs are rolling over. I am convinced that he has, in addition to the financial information he stole, thick files on every single R in congress, and he's blackmailing them to roll over and play dead. Most of Congress isn't stupid. If they know how awful, how unlawful, how insane what Elon is doing, then they're deliberately doing it.
Isn’t Musk in a bit of a tussle over filings with the SEC?
These last two weeks have been nuts. I thought investors and businesses required stability. This doesn’t look like stability to me.
SEC, most likely his next victim.
Unexpected consequences. I represent one of the last American apparel manufacturers. They do a disproportionate amount of business with Canadian specialty store retailers. This morning, most of these Canadian women's apparel stores cancelled their Spring orders. That jeopardizes the future of this 30 year old company (and American jobs from NC to CA). No manufacturer can afford to absorb such a financial hit. Will the business be re-instated by the suspension of tariffs? Unlike automotive parts, the Made in America factor is not hidden inside. We will bear the anti-American backlash for now and who knows how long. If the company continues
I'm so sorry you and so many others are going thru this. Except the T voters: I'm not sorry for them. I don't think there's anything else that will get thru to them.