Power versus Money, Silver's outperformance, ECB cuts rates
Power versus Money
Elon Musk has hopefully learned a valuable lesson over the last week.
In the world of politics and high finance, power will always come out ahead of money.
This is not a new lesson. It is something upstart nobles and traders have learned repeatedly for generations.
The demise of Jack Ma in China followed his criticism of the financial regulator and the Communist Party. That was a lapse of judgement at best but could more correctly be described as hubris.
It resulted in the splitting up of his company and a long period where he was encouraged to keep to a very low profit.
There is a good argument that Elon Musk was instrumental in getting President Trump elected for a second time. However, that does not go as far as ensuring the President is his puppet.
Their relationship has been deteriorating for the last month and the public conflict escalated this week.
This is a time for Elon Musk to do something that is uncharacteristic. He needs to shut up. The potential for the government to do untold damage to his business interests is unlimited.
If he decides to make defeating the spending bill a personal crusade, his businesses will suffer.
That is what began to be priced into Tesla shares this week.
The threat of cancelling government contracts for SpaceX is a much bigger issue. Several other space companies would benefit from a chance to launch NASA’s payloads.
SpaceX has dominated the sector for several years but this argument will support greater diversity in the kinds of companies that benefit from the reusable rocket boom.
It is worth remembering that this is not the first time that companies have had to bow to power.
Companies like Meta Platforms and Alphabet refused to work with the defense industry for years. That was a reflection of the pacifist attitudes of many employees.
Since the first Trump administration they have been quietly working more closely with the defense sector.
