The week so far has been quite clean. We had the DeepSeek plunge on Monday and the everything-is-just-fine-you-big-sillies countertrend rally yesterday, which undid most of the fun. Today, of course, is the Jerome Powell show, and my hunch is that he’s going to let the air out of the tires again.
You wouldn’t know it looking at the /VX futures, though. Volatility is barely showing a pulse, and everyone is certain that the future is bright, sunny, and carefree.
We’re only nine days into the new administration, but it’s already been a fascinating freak show. The pattern so far has been, one, Sweeping Executive Order, and then two, Judge Blocks Order. Thus, we’re all still paying for a government which basically does nothing but fight with itself.
In that spirit, I’ve been quite interested in what I would call fading omnipotence. That is to say, going against the notion that the new POTUS has the powers of a monarch, which is how stocks in his orbit were being priced. For example, I bought June $40 puts on the private prison company Geo Group, and those are up 27% so far, because this sucker has fallen every single day since inauguration (marked with the red arrow, which is when I bought it).
Even “First Buddy” companies haven’t been spared, as Tesla has slumped from the $450s to, at times yesterday, sub-$400s.
Oh, look, another private prison company. Again, inauguration day is marked with the arrow. Maybe it isn’t going to be the incarceration celebration everyone was hoping. How often do you see a stock drop every blessed day? I mean, I’d love that to be our world, but it’s just not normal.
And even with the pledge of 0% taxes and a massive Strategic Bitcoin Reserve, ever since the lifetime peak on inauguration day (are you sensing a trend here?) $BTC hasn’t done dick.
Today and tomorrow are going to be amazing, for better or worse, because the FOMC will be very revealing in its first kabuki theatre in this new administration, plus we’ve got a smorgasbord of earnings on the way.
