What a week. Let’s try to rein it all in…
The First Amendment states:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.
These words — signed into agreement this week, 236 years ago — helped establish the rule of law in the United States. Citizens are free to interpret them as they wish. And wish… they do.
A few voices from the inbox:
- “Thank you for standing up for the 1st Amendment. No further proof should be needed that all the things that were said before the election about Trump being a fascist dictator have come to pass.”
- “Kimmel got cancelled because Nexstar wouldn’t carry him. That set Disney off. It looks like paranoid business decisions more than government censorship.”
- “The Woke-Jacobin Left broke into a happy dance when they heard the news of Kirk’s death. Jimmy Kimmel didn’t just tell a bad joke — he made a Judas of himself.”
One could argue that invoking Jimmy Kimmel’s monologue about Charlie Kirk’s assassination as justification to yank broadcast licenses is government overreach. But here’s one big difference on the balance sheet of liberty:
Jimmy Kimmel is still breathing.
Charlie Kirk is not.
Kimmel can appeal to courts, boards, or the public. Kirk’s only recourse is his will.
Markets thrive on incentives, not coercion. But this week’s headlines remind us: For investors trying to preserve wealth in the Trump era, telling the difference is as complicated as ever.
Stocks Swing Back
Equities regained their footing yesterday after a shaky post-Fed session. The Dow rose, while the S&P 500 and Nasdaq followed after investors weighed Jerome Powell’s “risk management cut” against mixed data.
Cracker Barrel didn’t join the rally. Its sales fell on backlash against a logo change. “Branding mistakes can sting shareholders,” Bloomberg quipped, “as badly as missed earnings.”
Nvidia Bets on Intel
Nvidia, the world’s most valuable company, isn’t coasting.
It will invest $5 billion in rival Intel, developing chips for data centers and PCs. The move boosts Intel’s turnaround — and instantly added $5 billion in value to the U.S. Treasury’s controversial 10% stake. Intel’s stock had its best day since 1987.
The Financial Times noted the deal shows how “geopolitics, government capital, and private innovation are now braided together.”
For investors, the line between statecraft and stock charts grows ever blurrier. We address the Trump era of state-directed capitalism in the United States in this month’s issue of the Grey Swan Monthly Bulletin. Paid-up members can review it here. (Spoiler alert: State capitalism has never been the West’s strong suit.)
Trump v. The Fed
In what almost seems like old news now, President Trump has asked the Supreme Court for permission to fire Fed Governor Lisa Cook, accused of claiming two primary residences — charges she denies.
Bloomberg pointed out the irony: Treasury Secretary Scott Bessent allegedly did the same.
No president has ever fired a Fed governor in the agency’s 112-year history. If Trump succeeds, it could redraw the map of Fed independence.
For now, investors have gotten what they want: lower interest rates.
Trump Also Wants Out of The United Nations
President Donald Trump has already pulled back $1 billion in funding from the United Nations (U.N.) and has told Congress he has plans to revoke another $1 billion.
“Since bureaucrats always and everywhere are fans of malicious compliance,” writes Liz Wolfe, “U.N. officials signaled that human rights programs would be some of the first to go. But now The New York Times headlines are trying to guilt the U.S. into … I dunno … spending infinite sums of money? Never pulling out or reevaluating the use of the diplomacy organization?”
Starbucks Sued Over Shirts
Starbucks faces lawsuits in three states over its May dress code change. Workers allege the company broke the law by failing to reimburse them for solid black shirts. Starbucks handed out two shirts for free, but employees say they had to buy more.
In our populist era, “even minor policy shifts can snowball into major costs,” the otherwise non-commital AP observes. For investors, culture clashes at consumer brands have become as material as balance sheets.
Free Speech or Forced Speech?
Also, already old news.
On Wednesday night, Disney benched Jimmy Kimmel after FCC chair Brendan Carr warned broadcasters they could “do this the easy way or the hard way.”
President Trump cheered on Truth Social, “That leaves Jimmy and Seth, two total losers, on Fake News NBC. Their ratings are also horrible. Do it NBC!!!”
Reason’s Nick Gillespie summed it up: “The FCC has a long history of jawboning — using state power to impact social norms. Scrap the FCC entirely and free up political discourse so that neither party can tip the scales.”
As much as our social media culture impresses immediacy on our fickle attention spans, these debates are not new. Philosophers have been noodling over freedom and the press for centuries.
In 1835, Tocqueville warned that liberty is “established only in the midst of storms.” In 1980, Scruton wrote about democracy, “Good things are easily destroyed, but not easily created.”
During the (not-so) Great Depression, Oakeshott distinguished between a state governed by rules (nomocracy) and one driven by political ends (teleocracy).
When regulators play cultural police, we slide from nomocracy to teleocracy. For investors, that means markets no longer obey the rules of fair play but bend toward political whims.
Cocaine Rising
Perhaps due to the tariff regime and public focus, fentanyl use is declining.
But cocaine use is surging.
The Wall Street Journal reports that consumption has risen 154% in the Western U.S. since 2019, as Colombian production booms and street prices fall by half. A UN study confirms the global surge.
One drug recedes, another surges. For investors, the lesson is that distorted incentives always impose hidden costs — on healthcare, productivity, and ultimately, taxpayers.
A Quick Read of the Signals Before The Weekend
The Fed’s rate cut was a carrot. Trump’s challenge to Lisa Cook is a cudgel. Nvidia’s Intel bet is both. And Kimmel’s suspension? A warning that liberty itself can be chipped away by government jawboning.
For the investor who values freedom as much as returns, the lesson is simple: stability rests not on coercion but on trust that the do-gooders will leave the market alone. Break that trust, and the market’s incentives fail.
At the very least, Trump’s fast and furious attempts at realigning the U.S. on all fronts — political, judicial, financial — make for entertaining reading.
The better angels tell us to ignore politics altogether. Unfortunately, for our money’s sake, we do so at our peril.
~Addison
P.S. No one was surprised that the Fed cut rates on Wednesday. The markets barely registered a response.
On Thursday, during Grey Swan Live! with Adam O’Dell, we got a rundown of the massive $10.1 trillion cash bubble in money market funds that’s likely going to find its way into small-cap equities. Mr. O’Dell believes an epic rally in small-cap stocks is about to be unleashed.
If you’re a subscriber and you missed it, catch the replay here.
If you’re not subscribed, find out how to join us now — and gain access to our entire archive of Grey Swan Live!
If you have any questions for us about the market, send them our way now to: Feedback@GreySwanFraternity.
