Trump-Musk: All “Kayfabe”?
Trump-Musk: All “Kayfabe”?
The kiss-and-make-up session is on, the kiss-and-make-up session is off.
Day 2 of the epic Trump-Musk meltdown is all about when and under what circumstances the two might start to reconcile.
We won’t get into the blow-by-blow of Day 1 — which you can read anywhere and you’re probably familiar with already.
(Truly, it was like the car crash you can’t help looking at.)
The stock market was in the green before the two started s***posting at midday. But at day’s end, the S&P 500 was down more than half a percent. Tesla makes up about 2% of the index and TSLA logged a 14.3% drop — its biggest one-day loss on record.
Late last night, Politico posted an article saying that White House aides “scheduled a call Friday with the billionaire CEO of Tesla to broker a peace.”
But this morning, the president told CNN he won’t be involved in any such call himself — saying the two won’t speak “for a while” and that he’s “not even thinking about” Musk.
It would be no surprise if the dynamic changes again by the time you read this.
There’s a theory circulated by armchair pundits that all of this is “kayfabe” — to borrow a term from pro wrestling, something Trump has been involved with for decades.
The term simply means that rivalries and other dramas inside and outside the ring are all for show, staged for the audience’s entertainment.
Assume for the moment that’s the case: What would be the purpose?
Sorry, we don’t buy it. As the independent reporter and astute political observer Michael Tracey tweets: “Is there any historical analog for a White House senior adviser who quit and immediately campaigned to tank the president's signature legislation, denounced him as an ungrateful liar, accused him of child sex trafficking and causing a recession and called for him to be impeached?”
Besides, why would Trump and Musk do something to potentially divide the loyalties of MAGA Nation?
The sheer volume of vitriol on Musk’s part suggests he was off his meds — or on something else.
But none of it is a long-term deal-breaker for his credibility. Everyone knows Musk can be mercurial; it comes with the territory of investing with him. The only difference is how the tendency manifested itself yesterday in such spectacular fashion.
Seen in that context, it’s little surprise that TSLA is up 7.2% as we write this morning.
Also note how quickly Musk backed down on one particular threat…
After an X user urged Musk to “cool off and take a step back for a couple days,” Musk replied: “Ok, we won’t decommission Dragon.”
Whether they like it or not, Musk’s SpaceX and Trump’s administration are much too dependent on each other for either side to walk away from their space partnership.
Dragon, as a reminder, is the only way American astronauts can reach the International Space Station. NASA is increasingly reliant on SpaceX for its many launches. And don’t forget SpaceX’s valuable Starlink division, with an unmatched network of low Earth orbit satellites the government also needs access to.
Indeed, nothing that’s happened in the last 24 hours alters the investment case for SpaceX.
Now as you likely know, SpaceX is not publicly traded. Only the high rollers of finance have access — a fact that gets under the skin of Paradigm Press publisher Matt Insley.
Then again, Matt recently learned from a venture capitalist friend about a hidden backdoor. “Just type in four letters,” Matt says, “and you can get pre-IPO exposure to SpaceX on the stock exchange — even though it’s private.
“Plus, my buddy is giving you the ticker symbol for FREE, just for watching today.”
Only one catch: This presentation goes offline tomorrow night at midnight. Click to watch now, while you still can.
PLTR’s “Bud Light” Moment
If it weren’t for Trump and Musk, the biggest market story yesterday would have been the sudden stumble of market darling Palantir Technologies.
The story begins a week ago today, when The New York Times published the splashy headline “Trump Taps Palantir to Compile Data on Americans.”
On the basis of an executive order Trump signed in March, the administration is increasingly turning to Palantir to make it easier for federal agencies to share data with each other — raising the prospect of whether Trump “might compile a master list of personal information on Americans that could give him untold surveillance power.”
Under the amoral logic of Wall Street, PLTR shares rallied 7.7% that day. By Tuesday of this week, Palantir closed at an all-time high.
While Wall Street partied, pockets of MAGA Nation sounded the alarm.
Suddenly, everyday conservatives were discovering what we’ve noted now and then for years: PLTR was founded in 2003 with seed money from In-Q-Tel, the CIA’s venture capital arm.
They also learned the CIA was Palantir’s only client for the first several years of the firm’s existence.
And via the work of the online muckraker Whitney Webb, they learned Palantir’s entire reason for being — to give the feds cover for doing things that the Constitution forbids the feds to do themselves.
Remember the creepy “Total Information Awareness” surveillance program launched about 18 months after the 9/11 attacks? Civil liberties activists objected loudly enough that the feds shut it down — only to put many of its operations under PLTR’s auspices.
The tweets and memes this week have been voluminous…
On Tuesday, Palantir labeled the Times story “blatantly untrue. Palantir never collects data to unlawfully surveil Americans.”
As the “Uncommon Sense” account on X pointed out, “Palantir is not lying here. They don’t illegally spy on people, they legally spy on people, and your government allows them to do it.”
Yesterday, Palantir CEO Alex Karp felt compelled to do an interview on CNBC, declaring his company is “not surveilling Americans” at all.
Reaction across the political spectrum was hostile…
… and PLTR ended the day down 7.8%.
Thing is, unlike Bud Light or Target or John Deere, Palantir has no “customer-facing brand” that everyday folks can boycott. Nor are there any, say, Palantir-branded surveillance cameras they can vandalize.
All they can do is dump PLTR stock if they own it… or persuade other people to dump it if they don’t.
Checking our screens this morning, Palantir is up about 3.8%. Perhaps as with Tesla, the big drop was a one-day affair. Then again, it might be the start of something. We’ll keep you in the loop…
Jobs: Clearing a Low Bar
The good news is that the monthly job numbers came in a bit better than expected this morning. The bad news is that expectations were low.
The wonks at the Bureau of Labor Statistics conjured 139,000 new jobs for May. The previous two months’ numbers were revised down.
So for the last three months, the average number of new jobs works out to a little over 135,000. That’s down meaningfully from the last quarter of 2024 (209,000). As a reminder, it takes 150,000–200,000 now jobs each month just to keep up with population growth.
Most of the growth took place in health care and leisure-hospitality. Manufacturing jobs, in contrast, shrank by 8,000.
Federal government jobs fell by 22,000 — just under 1% of the federal workforce. Go figure: DOGE is finally starting to have a measurable impact on federal employment just as it’s folding its tent.
The official unemployment rate held steady at 4.2%. Still low by historical standards, still higher than most of 2022–23.
Amid that backdrop, the major U.S. stock indexes are shaking off whatever jitters they were feeling yesterday.
As was the case in the hours before the Trump-Musk kerfuffle broke out, the S&P 500 is knocking on the door of 6,000 — up almost 1% from yesterday’s close. The Nasdaq’s gain is stronger, the Dow’s weaker.
Silver continues to rally and is *this* close to ending the week over $36. Gold is losing ground but not much, the bid $3,334. Crude is up over a buck to $64.52, the highest since mid-April.
Bitcoin sank to near $101,000 overnight but is now back to nearly $105,000.
Comic Relief
A couple of more giggles from the Trump-Musk dustup…
If you’re a bit fuzzy on the historical reference, a quick glance at this Wikipedia page will serve as a reminder.
Finally, this insight courtesy of your editor’s wife…
“So I guess we’re not getting our $5,000 DOGE dividend?”
Time Flies
A belated acknowledgment to everyone who wrote in after two of last week’s editions — reprises of previous musings about the military-industrial complex and the health care cartel.
With another week already gone by, I’ll simply have to thank everyone who wrote in with their thoughtful responses. We really do have the smartest and most engaged readership in all of financial publishing.
(And to the veteran who agreed with me about the military-industrial complex but thought the Memorial Day timing was in poor taste — I totally get where you’re coming from. Thank you for taking the time to speak up.)
We’ll give the final word to a reader who sought to weigh in on both of those industries…
“I appreciated your recent musings highlighting the immense public funds flowing into America's military-industrial complex and the health care sector — both effectively government-sponsored monopolies. While the system is on a trajectory to break, the powers that be will not take action while the music is still playing.
“We are watching the perpetual ‘money game,’ where cunning actors ingeniously seek paths to wealth and power. Ideally, they prefer the easiest route — taking money rather than creating genuine value. Government emerges as the most lucrative and accessible conduit to funnel public funds from the masses into private hands under the noble-sounding guise of national defense or public health.
“This strategy is straightforward and astonishingly effective: Invest relatively small amounts of money in politicians through campaign contributions and lobbying efforts and reap exponential returns through government contracts, subsidies and protective legislation. The military-industrial complex and the health care industry serve as ideal laundering mechanisms, converting public resources into concentrated private gains.
“Thus, politicians' inertia, including Trump and the current Republican legislative menagerie, is not accidental. They have no incentive to dismantle or even reduce these sectors, as doing so would disrupt the machinery that sustains their power and enriches their benefactors.
“Thank you for shining a spotlight on this game. Your voice is crucial in exposing that which thrives in the shadows of public ignorance and political complicity.
“Hell of a time to be an American.”
Dave responds: It’s as good a moment as any to cue up my favorite George Carlin rant…
Have a good weekend,
Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets
