Political Pathos

Markets stumbled into Thursday like a sleep-deprived toddler: twitchy, over-stimulated, and not ready for the job numbers due out that morning.

Then the sideshow arrived.

It would be impossible to account for the undoubtedly millions of hours of productivity that were lost yesterday at the fingertips of two men addicted to social media and self-regard.

Elon Musk, bruising while Tesla shares were nosediving, took to X (formerly Twitter, now functionally TMZ for oligarchs) to suggest that Donald Trump be impeached.

The reason? The President floated canceling federal contracts tied to Musk’s ventures, notably SpaceX, in retaliation for Elon’s public trashing of Trump’s tax bill.

That is one conclusion you could arrive at if you bothered to try to keep pace with the X tweets and Truth Social retorts.

This was a good one, too. From Elon: “Maybe the Epstein files aren’t public because someone’s name is on them.”

We’re curious because he left it, if Musk still believes, as he once said of Trump, he’s “the most stable genius of the 20th century.”

Memory on social media, like the stock valuations of their two signature companies, Tesla and Trump Media, fluctuates on adrenaline.

By the end of the 10-hour, 57-minute spat, Musk signaled he might walk back his threat to decommission SpaceX’s Dragon fleet.

In response, White House aides scrambled to organize a peace call, per Politico. (If you’re a gossip historian and you’d like some play-by-play detail, Bloomberg paid somebody to write them up, here.)

The markets, much like gossip columnists, lapped it up. Tesla shares bounced in the premarket. But not enough to erase the single biggest wealth drop of Elon’s career. He’s still worth a gazillion if measured in accurate tech parlance.

As for shareholders? “Elon isn’t functioning to the benefit of his shareholders,” said Tesla investor Ross Gerber. Mmn.

 SALT in the Wound

Meanwhile, in the affairs of state, Trump’s tax bill is still an abomination in progress. He’s now reportedly open to lowering the SALT cap below the $40,000 ceiling passed in the House. Senate Republicans are licking their chops.

The Treasury issued a half-hearted warning to China about currency manipulation, called out Japan for its weak yen, and politely asked the BOJ to raise rates — as if Tokyo needed advice from the architects of Quantitative Easing: American Edition.

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Did Trump Crash The Market… To Save It?

The mainstream media thinks Trump is out of control. But one of America’s top economists says: “It’s all going according to plan.”

He calls it THE GREAT RESET — a $7 trillion strategy to tear down the old economy and build a new one in its place.

Love or hate Trump, you need to understand what’s happening now. Your financial future may depend on it.

Don’t get blindsided… watch this now.

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 Surprise, The Inflation Data Is Garbagel

The mainstream financial press has just figured out that the inflation data we’ve been reviewing from the Bureau of (be)Labor(ed) Statistics is wonky.

At least, they have a culprit.

When Trump reinstated the federal hiring freeze on his first day back in office, he also kneecapped the very agency tasked with measuring inflation.

The BLS has shed 15% of its staff this year, meaning fewer people are wandering through Walmart jotting down the price of eggs.

So what do they do instead? They guess. In fact, they’ve been relying on “different-cell imputation” — a method even BLS veterans admit is one part math, two parts hopeful fiction.

It was used more in April than at any time in the past five years.

The press is only now catching on. But the implications are enormous: this data informs interest rates, tax brackets, Social Security payouts, wage contracts… and, oh yeah, every investment decision Wall Street makes.

Inflation may be in your face at the grocery store, but it’s AWOL in the government data, where reality is now a rounding error.

 Jobs Report: Coming In Hot… Or Faked?

The May 2025 jobs report is in. The U.S. economy added 139,000 jobs — close to the 12-month average of 149,000. Not too hot, not too cold. Just soft enough to be confusing.

As our colleague – and #1-rated economist at Bloomberg for payroll data – Andrew Zatlin notes:

“Payrolls were propped up by Healthcare and one-time boost from Restaurants. Labor market mostly remains at a standstill. Seasonal Factors were more favorable than I expected and added tailwind to the May figures.”

Health care led the gains (+62,000), followed by leisure and hospitality (+48,000), and social assistance (+16,000). Meanwhile, the federal government — bless its shrinking soul — shed another 22,000 jobs.

On the surface, these numbers seem steady. Unemployment held steady at 4.2%, again, neither too hot nor too cold.

But remember: the BLS’s own Quarterly Census of Employment and Wages shows job growth in 2024 was overstated by an average of 75,500 jobs per month.

That’s not just a rounding error. It’s also fiction with a federal seal of approval.

We’ve been keeping an open tab of bad signs brewing in macroeconomic data from commercial real estate to AI-inspired layoffs.

We don’t trust a lot of it yet, however, because the real impact of tariffs has not yet begun to impact consumer prices, unemployment or production.

Also this week: Procter & Gamble announced it’s laying off 7,000 white-collar workers — 15% of its non-manufacturing staff.

The company swears it’s not about AI cost-cutting.

 Eurozone: Slouching Toward Stagnation

Across the Atlantic, the European Central Bank cut interest rates to 2% — its eighth quarter-point cut in a year — in a bid to revive the sputtering eurozone economy.

The ECB pointed directly to the fallout from Trump’s trade war as justification. Growth is weakest in France, Germany, and Italy, with forecasts for next year barely flickering.

Rates in Europe are now less than half those in the U.S. and the U.K. Trump, of course, blamed Jerome Powell.

“ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!!” Trump posted Tuesday, apparently confusing a data drop with a reality TV recap.

Even the Bank of England’s governor muttered that Trump’s policies have made the UK’s rate policy “more uncertain than ever.”

That’s also diplomat-speak for: “We’re flying blind.”

 Crypto Makes Its Wall Street Début (Again)

Circle Internet Group — the stablecoin outfit behind USDC — went public yesterday. It launched on the NYSE at $69.50 and closed the day at $82.84, up 167%.

That’s a stablecoin, by the way. The kind of digital token designed not to swing wildly. Naturally, it was halted twice in the first few minutes for “excessive volatility.”

Crypto creeping into Wall Street. What could go wrong?

Circle’s success opens the IPO floodgates for other fintech hopefuls like Chime, Klarna, and StubHub Health, all spooked earlier this year by — you guessed it — Trump’s trade war.

But with IPOs in the green and crypto sentiment on the mend, the bubble machine is sputtering back to life.

Tether’s $158B USDT still dwarfs Circle’s $62B USDC, but the race is on. And with a stablecoin-friendly bill creeping through Congress, even the bureaucrats are catching the crypto bug.

Still, remember: hype begets hype. And pessimism begets collapses. In crypto, both come faster than you can say “regulatory clarity.” It’s a trend with some gumption, however, and it’s going to matter.

As Andrew has relayed, VP JD Vance emphatically announced, “We hate regulators” at the 2025 Bitcoin Conference last week in Las Vegas. What isn’t being said? That stablecoins are a big buyer of U.S. Treasurys – and more buyers can help push yields down.

 Musk back to Mars, and Planet Labs to the Moon

Speaking of things launched into the stratosphere, satellite imagery firm Planet Labs surged 50% yesterday.

Why? For once, actual fundamentals: positive free cash flow, record revenue, and a quarterly beat on both top and bottom lines.

Imagine that — profits. In this economy?

Maybe Musk’s attention should stay on space, where physics, unlike politics, still obeys natural laws.

 Welcome to Humanoid Park™

Amazon, in a move that sounds more like a Black Mirror pilot than a logistics strategy, is now testing humanoid delivery robots.

The company has built an obstacle course in San Francisco — complete with a Rivian van — for training AI-powered droids to “spring out” and deliver your Prime orders.

Soon enough, Jeff Bezos will have completed his holy grail: a fully automated supply chain, from warehouse to doorstep, no humans needed.

But hey, that’s just the free market doing its thing… until your kid’s summer job is replaced by a hydraulic knee joint.

 Around the World

Japan recorded fewer than 700,000 births in 2024 — a demographic cliff so steep, Prime Minister Shigeru Ishiba labeled it a “silent emergency.”

Their population could drop to 87 million by 2070. But while Japan shrinks, American tourism does too — for entirely different reasons.

Trump’s border crackdowns, trade war tantrums, and rollback of LGBTQ rights have driven foreign visitors away. Canada, once our most dependable neighbor, is boycotting vacations here. US-bound travel is down 2.5% this year — and March, the month Trump announced tariffs on Canada, China, and Mexico, saw a 10% drop.

Even Airbnb and Expedia are warning of weaker-than-expected earnings. Meanwhile, Colombia — yes, that Colombia — is seeing an uptick. Who needs Disney when you can visit Pablo Escobar’s old hideout and wrestle a pit viper?

In France, they’re observing the 81st anniversary of American, British and Canadian troops storming the beaches of Normandy on D-Day.

General Eisenhower, knowing the risk, prepared a statement in case of failure: “If any blame or fault attaches to the attempt, it is mine alone.”

A stark contrast between Eisenhower’s sobriety and the performative government we got from Trump and Musk yesterday, eh?

Eisenhower, of course, didn’t need to shoulder any blame in the end.

~ Addison

P.S. Yesterday’s Grey Swan Live! was a tour de force. Frank Holmes discussed everything from crypto mining – and his pivot to data centers – to the importance of hard money as seen from the devaluation of airline miles. And his lifetime of raising capital, including the launch of several ETFs designed to take advantage of today’s top trends.

Paid-up Fraternity members can find the full 90-minute recording posted on the Video Archives section of the site. Grab a drink – and a notepad. Frank is a modern Renaissance man bursting with unique ideas worth incorporating in today’s markets.

Your thoughts? Please send them here: addison@greyswanfraternity.com