Apologies in advance, kids. Though I have rarely seen such a frenzy of opinion-slinging as has been produced about the recent dust-up between you know who and you know whom, the topic is virtually irresistible — including for yours truly, and I find that I simply must weigh in.
So, it had to happen sooner or later, and, like many, I’m surprised that it took this long.
It’s all reminiscent of that brief fling between star-crossed lovers: 45 and The Mooch. But in many ways even more compelling. Our irresistible Musk and our Immovable Orange Man’s relationship seemed more authentic, ran deeper, and just may have more dramatic consequences than that earlier ONS.
But after +/- a year of slobbering over one another, the rupture has occurred. Thus far, it has been, on balance, a civilized decoupling. Much like the one between Gwynnie and that dude from Coldplay. The latter just ended an 8-year relationship with the fetching daughter of Melanie Griffith//granddaughter of Hitchcock siren Tippi Hedren, while the former has commercialized her most womanly essence in the form of scented candles. The two remain friends. Perhaps the same will become true for our fearless, titular warriors. But it could get truly nasty, devolve into utter madness – with collateral damage flying in every direction, including towards us.
Because, as everyone is aware, you don’t cross Big Daddy without paying an enormous cost for doing so.
I am on record as being what might, in less polite society, be referred to as a Musk Sniffer. But it didn’t start out that way. When Tesla first burst into ubiquity, I was full-on nauseated by the self-congratulatory way the Company – on the backs of obscene taxpayer subsidies – cashed in while celebrated its own brilliance. To me, Musk was just another dude anointed into the enshrined circle of the uber-privileged, eager to look down on us proles with empathetic derision.
He kept his eyes open, though, and his hands anything but idle. Tried, with mixed success, to build better batteries. Launched a space exploration company that pioneered reusable spacecrafts, helped rescue our stranded space station astronauts, and created a satellite network that is already providing telecommunications to broad swaths of heretofore underserved (if indeed served at all) constituencies. He took over Twitter and rebranded it X. Some folks say he ruined it; others view him as its savior. I lean towards the latter.
At some point, he became a Free Enterprise zealot, moved his companies out of California (good job there), and joined the Conservative Caucus. This led to a partnership with Trump and a mandate to reduce government spending which accomplished little but was certainly worth a try.
He is, to summarize, an Irresistible Force, fueled by a compelling combination of intellect, energy and curiosity, and I believe that we are significantly better off for his arrival on the scene. But in breaching into political realms, he was destined to collide with that Big Immovable Orange Object in Washington. And implode.
And I find the timing and nature of the throwdown to be unfortunate. Elon is right. That Big Beautiful Bill is a pile of garbage. Full of enough cynical, slimy payoffs to please even them most unconstrained Machine operative in the Tammany Hall universe.
And this is to mention nothing of its failure to address our most intractable problem – an amount of global indebtedness that is beyond the means of repayment by several orders of magnitude.
It is important to note, by way of context, that GLOBAL GDP currently hovers around a quaint $100T. Thus, in result, if ALL worldwide economic activity were to be mapped exclusively to squaring matters with The Man, it would take three full years to get even – and that’s setting aside nothing in the way of still-accruing interest payments.
At ~$37T, our Federal Government Debt represents ~15% of this astonishing total, but even wiping this away would leave us at 10x the levels prevalent a mere 20 years ago.
I struggle to arrive at a scenario under which this problem can be addressed without catastrophic economic, political and (likely) military consequences. But that is a story for another day.
Meantime, Elon’s wrong here. This horrible bill simply MUST pass. Otherwise, we’re in real trouble. For the bazillionth time, failure to extend the 2017 tax cuts will, I believe, send us into a spiraling Depression. Contemporaneously, the Republican-led Coalition in the House CANNOT possibly survive such failure. In terms of the 2026 mid-terms, they are already paddling historically upstream — as the Party in Power loses on average, 25 seats. Which, according to my mathematical models and given their current 2-3 seat majority, would clearly cost them control.
At which point both of our heroes can plan on pitching tents in the Capitol Building, where Elected Officials will grill them into the next world. This will be political payback at minimum, and perhaps serve as a weigh station to the hoosgow.
So, while I applaud Elon’s decision to get out of Washington while the getting was good, I think he should’ve kept his big mouth shut about political affairs that are no longer his primary concern.
There are enough within the Republican Senatorial Caucus to call out the Bill’s Bull Snipe. Good on them, I say, but I’m confident that when the smoke clears, they’ll knuckle down and pass something. Because their cushy careers are riding on them so doing, and they thus can be counted upon to come through. So, again, Musk’s musings, while justifiable, are unhelpful – at least when expressed in public forums. And they add to the potential hazard of a rhetorical breakdown that could be (already is) at minimum annoying and, extrapolated, could cause significant harm.
As I type this out, equity markets don’t seem to give a care about these risks. The rally, for now, is on, and our indices are now visibly, if marginally, in the black. Yes, there is continued pressure on the Treasury Complex, and the dollar remains depressingly below 100. But in general, matters are perkier than they were a month ago.
As the Quarter winds down, all that remains in terms of information flow are items in the realm of macro- land. This past week, the May Jobs Report dropped, with superficially strong content but troubling questions in the details. Downward revisions for the preceding two months. A visible decline in the Labor Force Participation Rate. A loss of Manufacturing gigs.
Our Immovable Orange Man – in trademark dialectic fashion – took a victory lap, while contemporaneously calling for – get this – a 100 cut bp by the Fed.
We still want a fortnight before the next FOMC meeting, but when it comes, they ain’t cutting 100. Nor 75. Nor 50. Nor even 25. The markets confirm this. And the markets, as we all know, are never wrong:
We can anticipate, in the interim, a couple of potentially impactful Inflation metrics. I doubt that we’ll see much movement in this data, but if they veer from expectation, the markets will move with them. Particularly if the numbers go up, which will be unpleasant from a valuation perspective.
Much more likely the reports will be as expected and we’ll remain, valuation-wise, within the same narrow ranges that have prevailed since mid-May.
That is, unless our two protagonists go all Lorena Bobbit on our asses. Which I don’t believe will happen but might.
I’m inclined to anticipate that the better angels of their natures will prevail here, as both sides are greatly incentivized towards this outcome. Elon should spend his time trying to recoup the ~$300B he has lost for daring to bring his talents and energies to Washington.
Trump’s efforts would be better expended addressing such legacy foes as Putin, Xi, Schumer, etc.
In short, I urge the Irresistible to become, well resistible. I have less hope for moving the Immovable; he’s not likely to budge.
But as we are stuck with him for another 3 2/3rds years, it will be on us to ensure that our mobility is in its upper ranges and put to good purpose.
TIMSHEL