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MS Now invited me on air recently to talk about Trump Accounts, the government-backed investment vehicles for children born between 2025 and 2028. The accounts went live in early July.

Bullet points below. Here’s the video:

Congress created Trump Accounts as part of the tax bill that went into effect last year. The government will seed each account with $1,000 that the child’s parents or guardians can invest in a limited set of exchange-traded stock funds, or ETFs. The idea is to give every child who qualifies a bit of exposure to the stock market.

There’s no income limit for qualification, and most children with a Social Security number qualify. The SSN requirement is there to ensure no undocumented migrants, Trump’s mortal enemies, take taxpayer money.

[Check out The Matterboard: The news that’s really worth your time]

Individuals and employers can contribute additional money to the accounts, which function like an IRA. It’s free money and everybody who qualifies should take it. If you invested $1,000 in an S&P 500 fund 18 years ago and reinvested the dividends, you’d have about $8,500 today.

There are some problems, though:

They shouldn’t be called Trump Accounts. Many people will think this is some kind of private Trump venture—like Trump’s memecoin, which was basically a scam—and steer clear. Trump’s egomaniacal drive to put his name on everything will obscure the fact that this is a no-cost investment funded by the government.

Why do they only run through 2028? Politics, duh. The law as it exists only includes funding through the last year of Trump’s term. What then? It’s yet another example of arbitrary partisan policymaking that leaves voters confused and cynical.

Cash-outs are coming. Once the child turns 18, there are incentives to keep the money invested or use it for a designated purpose, mainly education or buying a home. But come on, some 18-year-olds are going to pay the 10% penalty, take the cash, and buy a motorcycle or a boat. Trump Accounts will undoubtedly finance some jackassery.

[How Trump is mimicking the socialist Mamdani 😱]

The smart move seems to be, take the $1,000 plus any employer or philanthropic contributions you qualify for. But it may make sense to put your personal money into other investments that are better structured, such as a 529 education plan.

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Yet Trump seems to have warmed to Mamdani’s idea of government-backed retail outlets. He’s now bragging about “Freedom Fuel” filling stations selling gas in the Philadelphia area for $3.47 per gallon, about 50 cents cheaper than the city average. The 47 represents Trump, since he’s now the 47th president.

The Trump White House says there are about 25 of these Trump-backed discount stations, mostly in southern Pennsylvania and New Jersey. Trump says a “very smart retailer” is running the operation, but won’t identify who it is. The White House says there’s no taxpayer money involved.

[Check out The Matterboard: News worth following and news you can safely ignore]

So maybe Trump can say this isn’t Mamdani-like at all, because it’s a private businessperson offering discounts, not the government. Except the retailer in this case is getting huge government benefits: A White House endorsement and priceless free promotion.

The White House published an 80-second video on its X account and other social-media feeds on July 7, promoting the Freedom Fuel stations. People who appear to be real drivers filling their tanks tell the camera how much they’re saving on gas, and thank Trump personally.

The video nabbed 5.4 million views on X as of July 9. The whole odd scheme has also generated news locally and nationally—more free publicity. The Trump stations might not be run by the government, but they’re getting a huge government handout in the form of a presidential plug and all the follow-up media attention Trump always generates.

[The Weekly WTF: Icky presidential bedroom]

At $3.47 per gallon, the Freedom stations are probably losing money on gas. The typical markup at filling stations is around 35 cents per gallon, and the average retail price in Philadelphia is $3.97, according to the AAA motor club. The wholesale price has to be considerably higher than what Freedom Fuel is charging.

So what’s the angle? There’s probably a businessperson who owns a bunch of independent gas stations and is a Trump supporter. These aren’t new gas stations, but existing ones that appear to have rebranded during the last few weeks.

If you’re thinking that Big Oil has a hand in this—probably not. Energy companies such as Exxon and Sunoco typically don’t own gas stations. They contract with independent owners on branding deals often locked in for years. So stations suddenly under the Freedom Fuels banner probably weren’t in contracts with big energy companies, else they’d be risking contract breaches with corporate giants.

[Why inflation might be coming down]

Patrick De Haan of GasBuddy noted on social media that somebody registered the entity “Freedom Fuel Network” as a business in Delaware on June 23. Official records don’t say who owns it, which is often the case.

So it could be a Trump-friendly business that’s willing to take a loss to lend the president a hand. But there’s probably a lot more to it. A good guess is that a Trump-friendly businessperson has made some tit-for-tat deal with Trump—selling cheap gas now, and letting Trump take credit for it, in exchange for some payback to be named later. That’s how Trumpworld operates.

It could also be a secretive political-action committee that is somehow funding the cheap gas, using money from wealthy donors. The rules governing political spending are notoriously porous, and the Supreme Court just made the holes bigger. So a PAC funded by “dark money” could be subsidizing the promotion, covering any losses for the station owner(s) and maybe even paying an additional service fee to make it a profitable gig for the owner.

Everybody wins?

Well, drivers saving money on gas probably don’t mind. But all the other gas stations that aren’t in on the scheme are getting screwed. They’re losing business to a competitor subsidized either directly or indirectly by the president of the United States. Trump might say, well, they should lower their prices, too, because it would be good for consumers. But businesses go bust when politicians interfere in ways that force them to sell their product at a loss.

[Trump v. Trump: Why the first Trump economy was better]

Mamdani is using government power in a different way, but it’s just as problematic as the Freedom Fuel ploy. Mamdani wants one city-owned grocery store for each of the city’s five boroughs, with New York owning the real estate and covering major costs. Private businesses would operate the stores, but they’d be required to offer sizable discounts on a basket of staples, such as meat, cereal and dairy products.

These stores would start with a huge cost advantage over private-sector businesses that have to pay rent and cover their own expenses, which is why grocers and bodegas are warning they could go out of business if Mamdani Foods undercuts their prices. Quality and selection are also likely to decline if a subsidized operation becomes a powerhouse calling the shots in certain neighborhoods, or in the entire market.

In each case, a politician is distorting the free market for political advantage. Mamdani wants credit for cheaper food prices, and doesn’t mind harming businesses he thinks charge too much. Trump wants credit for cheaper gas prices, and has lent a government endorsement to a shady operator underpricing the market.

The real threat to the country comes from the whole political spectrum.

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Okay sure, some people can, and do. But The Pinpoint Press is for normies, and a big part of our mission is telling you what matters and what doesn’t, to help optimize the fact-to-fluff ratio of the news you consume.

So we’ve created The Matterboard, our weekly assessment of what’s worth your attention and what isn’t. The Matterboard features four quadrants, as you’ll see below. We’re ranking the news based on how important we think it is—the stakes— and how long we think it will matter—the duration.

You might disagree with our assessments or feel like we missed something on the political-economic spectrum. Let us know! Sound off in the comments below, in the Substack notes app, or by sending an email.

We’ll summarize our entries each week by quadrant, starting with what’s most important. Here’s the list as of 7.7.2026, which includes the Graham Platner meltdown in Maine, Trump’s startling intervention in the World Cup, and the rise of the new Democratic socialists:

WORTH YOUR ATTENTION (upper right quadrant):

Ukraine pounding Russia. The Russia-Ukraine war was static for a long time, but Ukraine has found new ways to destroy energy infrastructure deep inside Russia and cause President Vladimir Putin a lot of domestic pain. It could mark a turning point.

Trump’s self-dealing. Roughly 1 million Trump supporters lost $3.8 billion buying the president’s scammy memecoin after he took office last year, demonstrating that Trump will dupe anybody. Even some diehard Trumpers are losing faith as his overall approval rating tanks.

[The Weekly WTF: Icky presidential bedroom]

Iran situationship. There’s a patchy ceasefire, but Iran has shown it is likely to harass ships targeting the Strait of Hormuz for a long time, as it seeks greater control over the whole Persian Gulf region. This could still be going on by the time the next president takes office.

WAIT AND SEE (upper-left quadrant):

Republican efforts to steal the midterm elections. Trump has sent FBI agents to intimidate election workers in Georgia and threatened many other moves to “take over” the November midterms. There are a lot of safeguards, but Trump may still attempt the most brazen election fraud in memory.

Fried oysterman. The Senate Democratic nominee in Maine, Graham Platner, is a plain-speaking oysterman who seemed like a rising star—until an ugly past caught up with him. Now, new allegations of rape have likely doomed his campaign. Dems thought they had a chance to flip the seat long held by Republican Susan Collins, but now they don’t even know who their candidate will be in November. If you’re a political geek, there will be no end of what-went-wrong analyses. For everybody else, the takeaway is: A new Democratic candidate might have a better chance of beating Collins if he or she carries less baggage.

The AI stock bubble. Is there one? Wall Street is split, but if it bursts and the stock market tanks, some worry about a replay of the dot-com bust of the early 2000s. The broader concern is that the huge AI buildout is holding up much of the economy at the moment.

[This is how the AI bubble could burst]

Birthright citizenship outrage. Some extremist Republicans are aghast that the Supreme Court recently upheld birthright citizenship, which has been enshrined in the Constitution since 1868. They want Congressional action to change this right, and some are calling for a ban on pregnant foreigners entering the country, to make sure they can’t give birth on US soil. We think these attack dogs have lost their minds and will soon find something else to bark at.

MEH (lower-right quadrant):

The Trump tariffs. They’ve fallen out of the news since the Iran war and the Trump energy crisis set the whole world on edge. But many Trump tariffs are still intact and his team of protectionists is plotting new ones. Trump will probably keep at it through his entire term.

[The Trump economy is barely improving]

The AI job apocalypse. It keeps not happening. We’re watching for it in every bit of data, but like many economists we also expect AI to create whole new categories of work and innovation.

Congressional housing bill. Congress passed a bipartisan bill meant to improve housing affordability on June 23, and it might actually do some good, over time. Trump, however, has refused to sign it, because he wants Congress to pass other legislation first. If Trump does nothing, the bill will become law soon—but Trump may not get any credit for it.

More Democratic socialists. A handful of Democrats identifying as “socialist” have won primary elections this year and are likely heading to Congress. We’re no fans of socialism, but the numbers are small and the real message these outsiders convey is anti-incumbency. Besides, the Democratic brand is such a wreck that an energized group of outsiders might make it better, not worse.

SAFELY IGNORE (lower-left quadrant):

Trumpflation. We think the rapid drop in energy prices during the last month will bring overall inflation lower and render market concerns about elevated inflation overblown. That won’t solve the affordability crisis, which is a long-term erosion in earning power for millions of Americans. That means Trump’s approval ratings on the economy will likely remain dismal, even if inflation falls—exactly the same thing that happened to President Joe Biden.

Hawkish Federal Reserve. See above. If inflation subsides, the Fed won’t have to raise interest rates this year, as the market currently expects. We think the Fed generates way too much chatter.

Elon Musk in your retirement plan. Musk’s company SpaceX is now part of the NASDAQ 100 index, which means it will be part of index funds that track the NASDAQ. Honestly, so what. If you own index funds, you also own shares of tobacco companies, fossil-fuel drillers and defense contractors. And the S&P 500 index, much more widely followed than that NASDAQ, won’t admit SpaceX for a long time.

[America 250 isn’t as grim as it seems]

World Cup bonhomie. There was poetic justice in Team USA’s loss to Belgium after Trump intervened with FIFA to overturn the one-game suspension of a star American player. The Americans lost anyway, which means the World Cup tournament can once again delight fans without the stench of political interference. The tourney is clearly a feel-good experience for everybody following it, and America, for once, seems like a gracious host. Enjoy it while it lasts.

Crypto winter. At around $64,000, bitcoin has fallen by 50% from its all-time high last October. Trump’s involvement in crypto may have been more like a kiss of death than any kind of endorsement, since it made the whole enterprise seem scammier than ever.

Apple price hikes. Apple stock fell 6% on June 25 after it announced price hikes of a couple hundred dollars on iMacs and iPads. Guess what: It has gained it all back, and then some. Underscores our point that financial media trumpets big moves and trends as they happen, but doesn’t always follow up to tell you what happened next.

Maxxing trends. First it was looks-maxxing, then came body-maxxing, sleep-maxxing, nonna-maxxing, vice-maxxing, and many other types of maxxing. Cliche alert: Too much maxxing. 86 maxxing.

Reflecting pool follies. We love the battle between Trump and the determined algae in the National Mall reflecting pool, who have become so famous that many tourists in the nation’s capital now stop by to see how they’re doing. We plan to milk this story for as long as it delivers delightful absurdity. But we know in our heart of hearts that this is news about nothing and when the weather cools in the fall, Trump will win. Still, the algae have already punched well above their weight. ^🫡

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What will the Federal Reserve do? Wall Street obsesses over this and if you watch financial news, you’ll see 27 opinions per day on whether the Fed will raise interest rates, lower them, or take other arcane steps to stimulate the economy.

What if the Fed does nothing for a while? There’d be a lot less to talk about, but markets wouldn’t mind and businesses could stop worrying about at least one thing they have no control over. It’s possible that longer-term rates on car loans, mortgages, and personal loans might gradually drift down, with no prodding by any central bank.

This might be exactly what happens for the rest of 2026. There’s been a jarring change in expectations for interest rates this year. In January, investors expected rate cuts, as a mild form of stimulus to guard against a weakening job market. But then the Iran war sent inflation higher and the outlook shifted to rate hikes, since that’s how the Fed fights rising prices.

[The Weekly WTF: Icky presidential bedroom]

Now, it’s starting to look like the Fed won’t change rates at all this year. The biggest factor is the sharp decline in oil prices, as the US-Iran war has morphed into a shaky ceasefire and oil tankers have once again started transiting the Strait of Hormuz.

Read more

Cryptobrohaha. President Trump made more than $2 billion in 2025, increasing his net worth by roughly one-third in a single year. It wasn’t from presidential pay. Most of that money came from crypto ventures he and his family formed after Trump won a second presidential term in 2024. Trump made money by licensing his name and likeness to meme coins that other people buy and selling stakes in his companies to others. Many critics see these businesses as pump-and-dump schemes peddling bogus assets as a way of collecting tribute from wealthy people seeking presidential favors.

Did crypto investors share Trump’s success in 2025? Um … no, it’s more like they just gave Trump their money. The Trump memecoin spiked in value for a couple of days after it launched on January 17, 2025, kind of like a hot IPO. Insiders who bought early and sold during the frenzy made bank. But the coin quickly tanked, and most of the people who bought the coin lost money. If you bought at the peak, by the end of 2025, you were down 97%. Analysts estimate buyers of the coin lost around $4.5 billion. Some of that went right into Trump’s pocket.

[If the AI bubble bursts, it might look like this]

Even bitcoin, the most established cryptocurrency, has lost value under Trump. Crypto bros backed Trump in 2024, because he promised looser rules for crypto and other ways to make it more mainstream. Bitcoin surged for a while in 2024, but ended the year down 7.5%. It has since plunged in value, and is now 35% lower than it was at the start of 2025. The Trump crypto pump seems to have run its course. Trump rarely talks about crypto anymore. He made his killing, mission accomplished.

Trash of the United States. Trump’s bedroom is a mess, according to a new book by New York Times reporters Maggie Haberman and Jonathan Swan. They report that Trump leaves junk food wrappers scattered about while noshing at night, and stains the carpet with spilt food. Trump also has carpeted bathrooms, they say, which grosses people out because carpets can get defiled with bathroom fluids (🙄). Haberman and Swan imply that Trump is kind of a pig.

When I see stories like this, it makes me wonder who is leaking (sorry, groan) and why. Is it current or former housekeeping staff at the White House or Mar-a-lago? Or are Trump’s sloppy personal habits an open secret among his inner circle? If somebody is trying to embarrass him, why? Could it be Melania? Is the bathroom carpet really a problem, like does it regularly rot away? And will presidential historians be studying this in 50 years?

[America 250 isn’t as grim as it seems]

Election goons. The FBI is rushing several hundred agents to Georgia to investigate election fraud that never happened. It’s all part of Trump’s fixation on his 2020 loss to Joe Biden in the state. Is the FBI going there to plant evidence and claim Trump won? Maybe. But this is probably about the 2026 midterms, with Trump and his crony thugs running the FBI trying to intimidate election workers and possibly set the stage for Trump to cheat in November, when Democratic Sen. Jon Ossoff faces a Trump-backed challenger. Trump’s megalomania would be comical if he weren’t vastly abusing federal power in the service of his fragile ego.

Birthright ruckus. The latest emergency among extremist Republicans is the Supreme Court’s appalling refusal to overturn birthright citizenship, which has been enshrined in the Constitution since 1868. The court killed a Trump order that would have limited birthright citizenship to certain people, so now some fringier members of the party are talking about legislation that might do the job.

[The Trump economy is barely improving]

One idea is to ban pregnant women from entering the country, just in case they’re coming here to give birth on American soil. How would that work? Declare your pregnancy status at customs? Would there be physical exams and pregnancy tests to make sure nobody’s lying? And Trump’s ever-trusty customs agents are going to handle this? Will they shoot pregnant women who step out of line?

It’s a dumb idea that can’t die fast enough.

Sweaty socialists. With temperatures in New York City soaring toward 100°, mayor Zohran Mamdani urged city residents to conserve energy and set their air conditioners at 78°.

Wrong temperature! He should have said 68°, or maybe 58°.

Republicans immediately attacked Mamdani:

• “The Social Democrats are coming for your AC.” (Sen. Lindsey Graham)

• “This is communism at work.” (Sen. Rick Scott of Florida)

• It’s “an act of war against women in menopause.” (Rep. Nancy Mace)

• “Telling New Yorkers to set their air conditioning at 78 degrees is an open admission of the failure of the left.” (Windbag Newt Gingrich)

Funny, though, the federal government’s own guidelines for AC say to set it at 78°. Many states recommend the same thing, including Trumpy-red Texas and Florida. Maybe they don’t get heat waves there.

At least it wasn’t an obituary. Did you hear that Supreme Court Justice Samuel Alito is retiring? He isn’t, but NPR published a story on June 30 saying that he was. Famed Supreme Court correspondent Nina Totenberg told her editors Alito was retiring because somebody at the Supreme Court told her there was a retirement announcement and she assumed it was Alito. So NPR published an Alito profile she had prewritten in anticipation of his farewell.

[Tech inflation is now a problem]

The story was only live for five minutes and Totenberg apologized to Alito, plus NPR fully explained itself. So they made amends. Still, this is a journalist’s nightmare scenario. I’ve made published mistakes, and you endure a kind of panic until making the correction. Then you sulk for awhile, feeling stupid.

That’s for small mistakes. This was one the entire journalism world noticed. Somebody obviously cut corners at NPR, but the underlying problem is the rush to be first with a story, which can be a perverse incentive that forces hasty and incomplete reporting. Most people don’t care who’s first, they just want a timely and trustworthy account.

There’s been a lot of speculation about Alito retiring this year after the court’s term ends, which it just did. It would be kind of funny if he retired sometime soon and Totenberg turned out to be right, just premature. Would NPR publish the same Alito retrospective some readers already got a glimpse of? Or does she have to start all over and write a fresh one, to make it seem spontaneous?

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Is this a bubble bursting? Nobody knows, and air has leaked out of the AI trade before, only to be followed by robust reflation. But semiconductor stock have been on such a tear—up 311% during the last three years—that it would only make sense if high-flyers such as Nvidia, Broadcom, Micron, and AMD floated back toward Earth at some point.

[Why tech inflation is a sudden concern]

What would that look like? How widespread would a selloff be? Will new public offerings—such as SpaceX’s recent debut, and Anthropic and OpenAI, coming soon— contribute to a bursting bubble? Will ordinary investors who invest in index funds get smoked, or is there someplace to hide?

I recently talked about all this and more with Dave Nadig, president of ETF.com. In a prior post, I outlined some of Nadig’s insights on the SpaceX public offering, which was controversial for a number of reasons you can read about here. Nadig also has thoughts on where AI is heading and how it might affect ordinary investors. Here’s the full interview, with a few bullet points below:

AI price cuts are coming. “I firmly believe by the end of the year, everything you think you’re paying for now will be free,” Nadig says. The competition, including AI offerings from China, will simply be too fierce for AI purveyors to charge a premium, or maybe to charge anything.

[Why Elon Musk is a trillionaire]

Price cuts would cloud the profit picture. If Google, Anthropic, OpenAI, and other AI firms can’t profit on regular retail users, they’ll have to make it up through big contracts with governments and corporations. But there’s already pushback there, too.

There’s likely to be a lot of overbuilding. That’s a key lesson from the dot-com boom and bust of 25 years ago, when companies borrowed heavily to install far more fiber-optic cable than demand at the time required. The modern-day analog could be the frenzy to build data centers.

This year’s big IPOs will cause turbulence, at a minimum. The effect tends to be minor at first, because only a small portion of the company’s shares typically hit the market on the IPO date. But many more shares become available months later, when insiders are allowed to sell, and that gusher of new equity could be destabilizing. “This is volatility-enhancing,” Nadig says. “To say that has a net positive or negative effect on the price of the S&P 500 is very difficult to call.”

But Americans think the job market stinks, and a middling jobs report for June won’t do anything to change their minds.

In the Conference Board’s monthly surveys, for instance, the portion of Americans who think jobs are hard to find is at the highest level since January 2021, when the Covid pandemic was still roiling the economy. The University of Michigan’s sentiment survey is near the lowest levels since it started collecting data in 1952. And President Trump’s approval rating on the economy has collapsed, with the majority of Americans saying the economy is getting worse, not better.

[America 250 isn’t as grim as it seems]

Here’s what the latest employment numbers show. While overall job growth has been positive during Trump’s second term, there’s been a notable slowdown in hiring since the Biden presidency.

Part of that slowdown may be a natural cooling from the stimulus-driven post-Covid boom. But Trump’s policies are probably a factor, too. Higher tariffs on imports raise costs on businesses and add uncertainty, which can depress hiring. And Trump’s aggressive deportations reduce the size of the labor force, which in turn reduces GDP growth and hiring.

Trump’s tariffs are meant to boost the manufacturing sector, because raising the cost of imports, in theory, makes it more cost-effective to build stuff in the United States. But that has done nothing to reverse a long slump in manufacturing employment.

The unemployment rate, at 4.2%, is relatively low. But it’s still higher than during the hiring boom of the Biden years.

It matters where the new jobs are coming from. Most of the new jobs are in health care and social services, where there’s a lot of mandatory spending going toward an aging population. Other sectors dependent on discretionary spending, which better reflect the dynamism of the economy, aren’t doing so well.

The information sector has shed 89,000 jobs during the last year, a sign that tech firms are retrenching and maybe replacing workers with artificial intelligence. Four other major sectors have shed jobs during the last 12 months. Job growth in business services peaked in 2022, with a broad slowdown since then.

[Are you better off than you were one year ago? Only if you own stocks]

Economist David Rosenberg of Rosenberg Research points out that outside of health care, social services, and education, employment declined by 12,000 jobs in June. The number of people in the labor force also declined, which means some unemployed people stopped looking for work. Had labor force participation stayed the same, the unemployment rate would have jumped from to 4.6% instead of falling by a tenth to 4.2%.

Perhaps most worrisome for Trump is an inflation rate that now exceeds wage growth. That means real earnings are negative, the typical paycheck buys less, and the average worker is falling behind.

There’s a silver lining. Modest job and wage growth means the Federal Reserve may not have to raise interest rates to choke off inflation. That gave stocks a modest boost after the job news arrived. Most investors think the Fed will raise rates by around half a point this year. But it may not have to if the end of the Iran war brings energy prices down permanently and there’s no sign of an overheating job market.

[There’s a new type of inflation to worry about]

That would be good for stocks, as lower rates are bullish for corporate profits. But the roaring stock market of the last year has not coincided with a job or earnings boom that benefits most workers. That may be the story for the rest of 2026.

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The semiquincentennial, as it’s formally known, arrives as Americans are pondering a clumsy war with Iran that seems to have empowered a rogue state known for espousing “death to America.” Some critics even think America lost the war. The president who launched that war, Donald Trump, is deeply unpopular, with a majority of Americans saying he goes too far on most important matters.

The portion of Americans saying they’re proud of their country is at the lowest level in the 25 years Gallup has been asking the question. The percentage satisfied with the direction of the country is a lowly 21%, a level typical during recessions. Sixty-four percent of Americans think the nation’s democracy is failing.

[Trump’s weekend wars could last for awhile]

It’s not all Trump. Most surveys gauging the national mood show a prolonged pessimistic turn that started with the financial crash in 2008 and the Great Recession that accompanied it.

So what’s to celebrate? Well, plenty, if you turn off the national news for a while and stop looking for trouble.

Americans seem to be a lot more satisfied with their own circumstances than with what they think is going on elsewhere in the country. Seventy-eight percent tell Gallup that they’re satisfied with their own personal lives, a number that’s just slightly below the historical average dating to 1979. The record high in this series didn’t occur way back in the Simpler Times of the 1980s or 1990s, but in January 2020, right before the Covid pandemic hit. As Trump began the fourth year of his first term, 90% of Americans said their lives were good.

[There’s a new kind of inflation to worry about]

Looking at these two charts together shows the growing disparity between Americans’ perceptions of their own lives compared with the nation as a whole.

It’s well understood that the United States has become an angrier and more partisan place as the media has fractured, the internet has given everybody a platform, and the outrage industry has metastasized to stoke every form of resentment. Trump’s own uberslogan—”make America great again”—implies that the nation has declined from some pinnacle moment when everything was better.

[The Weekly WTF: Algae and Iran conspire against Trump]

Look closer at the details, and that doesn’t hold up. The last big celebration of American heritage was the bicentennial, in 1976. America had just lost the Vietnam War, with nearly 60,000 dead and American prestige shattered. The Misery Index, which measures inflation and unemployment combined, was 14.5, nearly double the post-war average up to that point. That was genuine stagflation.

A bear market in stocks began in 1972, and it would take seven years for stocks to reach new highs. A Mideast oil crisis had just caused widespread gasoline shortages and revealed a dangerous reliance on foreign energy. The film Network popularized the rant, “I’m mad as hell, and I’m not going to take this anymore.”

The United States eventually roared back from that low ebb. By the mid-1980s, the economy was humming and inflation was down. The United States romped over Iraq in the 1991 Persian Gulf War, restoring some global swagger. The collapse of the Soviet Union later that same year was an epic victory for capitalism and democracy. The late 1990s marked new highs in living standards.

If you’re combing the past for a high-water mark, you could make it 1988, at the end of Ronald Reagan’s presidency, or 2000, at the end of Bill Clinton’s. That gives you a Republican and a Democrat to thank for the memories. You could be ecumenical and pick both. Both years represented major improvement over conditions in 1976.

[The Trump economy is barely improving]

Of course, we have a lot now that we didn’t have then: new medical cures, smartphones, streaming, deeper space exploration, Reddit, Taylor Swift. We have new problems, too. Wealth inequality has been worsening for decades. It takes a bigger portion of income to buy a home. Rapid technological change locks some workers out of the labor force for good.

The worst development of the last few decades may be a new political class that doesn’t fix problems. The national debt only gets larger. Medicare and Social Security creep closer to insolvency. The federal minimum wage hasn’t risen in 17 years, but there have been six government shutdowns totaling 175 days during that time span.

Trump has driven home the sense of betrayal by saying he’ll get prices under control, then acknowledging that he never really cared about people’s affordability struggles.

What Americans really seem to be saying in all those surveys is that life in their communities is pretty good, but the higher up the chain you go, the worse it gets. They especially dislike the people running the country, and it probably doesn’t matter much whether they’re Republicans or Democrats.

At the federal level, America stinks. But at the local level, it’s pretty damn good. That’s where people hold their block parties and backyard barbecues, and those are the proper venues to celebrate the nation.

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The sniping is taking on the characteristics of a weekend affair, with US and Iranian forces shooting at each other for a couple of days, then wrapping everything up before US markets open on Monday morning. Trump clearly doesn’t want any more energy shocks rocking his presidency. But Iran is still fighting to control the vital shipping lane out of the Persian Gulf, and not yielding much. This could go on indefinitely, with unhappy implications for oil and energy prices.

The latest dustup illustrates what Iran is trying to accomplish—and why it might work. Before the war, there was one main shipping channel through the middle of the Strait of Hormuz, which is 21 to 24 miles wide. That route is now mined.

So now there are two other routes—one that hugs the Omani coast, to the south, and another that passes close to Iran, to the north. Iran wants all ships to take the Iranian route, so it can charge hefty tolls or otherwise manage traffic as it sees fit. But Trump says that’s unacceptable, since it would violate global shipping norms and give Iran more power over Middle East energy shipments than it’s ever had.

On Thursday, June 25, Iran struck a container ship exiting the Persian Gulf with a drone, because it was taking the wrong route, the southern one near Oman. That was an obvious violation of the US-Iranian ceasefire agreement. So on the evening of Friday, June 26, Washington, DC time—after markets closed for the week—US forces retaliated by attacking Iranian military facilities along its southern coast.

[The Weekly WTF: Algae and Iran conspire against Trump]

Iran responded to that by hitting a Qatari oil tanker with a drone the next day. US forces hit more Iranian targets. Iran launched drones and missiles at US bases in Kuwait and Bahrain. Then on Sunday, June 28, American officials told media outlets that the United States and Iran had decided to stop attacking each other. Stocks rose when the markets opened on June 29, and the big story that morning wasn’t Iran but a flurry of controversial Supreme Court rulings.

Did Iran really agree to no more attacks? Doubtful. Iran continues to warn shippers that the Iranian route through the strait is the only acceptable one, and to threaten attacks against ships that don’t comply. “This aggressive behavior will likely continue,” Noam Raydan of the Washington Institute for Near East Policy wrote in a June 26 analysis. “The United States and its regional partners will need new policies and measures to ensure that Iran is not the only authority dictating rules in the strait.”

[There’s a new kind of inflation to worry about]

A cycle of Iranian attacks, US counterattacks and relative calm by Monday morning could continue for months. Iran knows that Trump’s hope for an easy military victory blew up in his face, and that he’s now eager to move on to something else. Trump himself is very likely the one dictating that episodic US military action always wrap up by Sunday night, lest markets get rattled and oil prices soar again. That means Iran knows it can pop a tanker or two late in the week, absorb a day or two of American strikes, then get a respite before doing it all over again the following week.

As this porous ceasefire has gone into effect during the last few weeks, oil prices have tumbled by way more than almost anyone expected. At around $73 per barrel, Brent crude prices are almost back to pre-war levels. That’s not because there’s a gusher of oil suddenly flowing out of the Gulf. Tanker traffic through the strait is still a fraction of normal levels.

Traders do think, however, that both sides have incentives to get the oil flowing, and they’re not especially worried about Iran charging tolls. Prices are down because traders think oil markets will be flush with supply sometime soon. If tanker traffic remains snarled and those supplies don’t materialize, physical shortages could push prices back up.

[Are you better off that one year ago? Only if you own stocks]

This might be the way it goes for the foreseeable future, with Iran and the United States shooting at each other periodically on what they think is a proportionate basis. Iranian attacks are meant to show the regime isn’t intimidated and plans to control the Strait of Hormuz. US counterstrikes are meant to show that the cops are still trying to police the neighborhood. Sure, there could be a miscalculation that leads to worrisome escalation. But Trump would probably have to break his usual Sunday evening deadline for that to happen.

Trump’s Iran war is unpopular, with solid majorities of Americans opposed to it. But it was probably more unpopular when oil was at $115 per barrel and gas was getting close to $5 per gallon. Gas prices are now back below $4, Americans are heading to the beach, and whatever is happening in the Middle East is becoming background noise. Trump wants to keep it that way.

Enjoy a cartoon.

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A stock market tear started at the beginning of April, when the Iran war was still hot and oil was well over $100 per barrel. For two months, the artificial-intelligence boom seemed so compelling that traders put aside concerns about a war and a global energy crisis, bidding stocks to new record highs.

Now, oil prices have tumbled to around $72, nearly back to pre-war levels. There are occasional ruptures in the Iran war ceasefire, but in general it is holding and oil tankers are once again plying the Strait of Hormuz. Yet stocks are in a June swoon and investors are worried about interest rate hikes. The euphoria of the late-war phase has morphed into anxiety.

What gives?

Just a few weeks ago, investors thought the end of the Iran war would bring energy prices down rapidly and alleviate concerns about inflation, which has jumped from 2.4% before the war to 4.2% now. That has partly happened. Assuming there’s no major resumption of hostilities and the oil keeps flowing, energy prices should be back to relatively low pre-war levels in a few months.

[The Weekly WTF: Algae comes for Trump]

But a new inflation gremlin has emerged. The AI boom has generated huge demand for memory chips, crucial to building data centers in addition to all the computing equipment everybody uses. Structural shortfalls have doubled the cost of these components, with no easy fix in sight. We’ve built a new chart to illustrate the trend:

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“The pool monologues.” That’s the Internet’s new sobriquet for President Trump’s regular harangues against the algae that keep fouling the reflecting pool on the National Mall that Trump is trying to clean up. Trump hosted NATO Secretary-General Mark Rutte in the Oval Office on June 24, and the biggest newsmaker from the session wasn’t the Ukraine war or the future of NATO or the Iran situationship, but the status of the algae and who might be abetting the algae in its vile scheme to drive Trump mad.

The upside to this scandal is that we’re all getting an overdue education on these plucky little organisms. For instance: This is why Trump can’t defeat the algae. Here’s why the algae turn everything green. This is why Trump attacked the algae at the wrong time of the year. Here’s an argument for leaving the algae alone and turning the reflecting pool into a huge aquarium, with fish and everything. And if you’re wondering if the algae is a metaphor for Trump’s entire presidency, well, many serious commentators can verify that yes, it is.

[Trump v. Trump: Why the first Trump economy was better.]

Aya-toll. Iran is firming up plans to charge tolls for ships passing through the Strait of Hormuz by copying the way Turkey charges fees for passage through the Dardanelles Strait, which a 1936 treaty allows. The Wall Street Journal reports that Iran could earn $40 billion per year in fees for “security, safety and environmental services,” and that Iran is offering to share some of this bounty with other Persian Gulf nations, to get them to buy in.

You might be wondering, hold on, was new money for Iran one of the goals of the war Trump launched against Iran on February 28? Well, it wasn’t then, but maybe it is now. Trump is desperate to end his Iran misadventure. Nobody supports this slipshod war any more, and Trump’s own Republicans are turning on him. With oil and gas prices now falling back toward normal ranges, there’s basically no chance Trump will face down Iran again and risk another energy crisis.

The combative algae and the defiant Iranians have conspired to drive Trump’s approval ratings to new all-time lows in the 30-percent range. The algae will probably retreat once fall arrives and the weather cools down. Iran will remain a menace for years, and future presidents will have to deal with the mess Trump leaves behind.

[Remember the Mag 7 trade? It’s now a bust]

No housing for you! I was getting ready to write an explainer of the housing-affordability bill Congress just passed, which is a rare bipartisan effort that might actually do some good. But Trump is standing in the way. Congress passed the bill on June 23, but the next day Trump said he wouldn’t sign it. He’s not vetoing the bill. What he’s doing is trying to hold the government hostage by blocking everything he can until Congress passes a janky election law, misleadingly called the SAVE America Act. Critics characterize the bill as a voter-suppression effort.

The SAVE America Act has passed the House, but all Senate Democrats oppose it, which means there’s no way it can get past the filibuster. So Trump is pressuring Senate Republicans to scrap the filibuster, in order to get it passed. They don’t want to.

Most Americans are not clamoring for a voter-suppression law. Many do want relief from high prices, including housing, which is the biggest monthly bill for most families. Trump will probably sign the housing bill, even if the delay means Congress has to pass it again. But he’s giving Democrats a gift by taking a stance against affordable housing, if only for a spell. And this comes after Trump said on camera on June 10, “I love the inflation.” Americans have peculiar tastes in presidents.

Shutdown, sure, why not. Imagine that your regular airline said it might shut down for a while in the fall. Or Amazon or Walmart or Netflix. It might be days or weeks, who knows. Sorry, customers, you’ll have to do without.

[Are you better off than one year ago? Our Better-Off Index has the answer]

Well that’s what Congress is signaling. Disputes over spending bills needed to keep the government operating after Sept. 30 are already so severe that members of both political parties are warning of a government shutdown just before the November midterm elections.

The death penalty seems a bit too severe for politicians who can’t keep the government open. But jail time might be appropriate? Fines? Hefty community service requirements, like cleaning trash off the Cross-Bronx Expressway for a couple of months? Whichever candidate makes this part of her 2028 presidential campaign gets my vote.

Is this thing on? When Trump signed an executive order on quantum computing on June 22, he stumbled while trying to read the words “quantum cryptography,” then asked a group assembled in the Oval Office, “does anybody know what that is?” You can watch brief clips here or here. Ask yourself if Trump has any idea what he’s signing, and if he doesn’t, who drafted the quantum cryptography order? Then send me your best joke about Joe Biden’s autopen.

[Here’s the real issue with the SpaceX IPO]

Can you spare some gas, brother? Russia, normally one of the world’s largest exporters of petroleum products, is running so short of gasoline that it’s quietly trying to import 50,000 tons of gasoline from Kazakhstan. That’s about one tanker full of gasoline, or 18 million gallons. More could follow.

Normally, nobody would care. But Ukraine is battering Russia’s energy infrastructure to the point that domestic shortages are developing in a fossil-fuel colossus, which is remarkable considering that Ukraine had essentially no long-range strike capability when Russia invaded in 2022. Now, Ukraine is wrecking refineries and other facilities in Moscow and elsewhere, with some of the world’s most advanced drones.

I provide updates on the Ukraine war from time to time because nobody should zone out on the biggest European conflict since World War II. Also, if life in America is bumming you out, it’s a good reminder that it could always be worse.

Solar power ^🌞. Here’s an upbeat WTF. The Energy Information Administration says electricity consumption from the grid in New York state is declining because of all the solar panels people are installing at the household level. Nobody tracks the amount of solar power generated home-by-home, because it never enters the grid. But household solar installation is up in New York and springtime demand for metered electricity declined this year, which EIA attributes to solar. As a wintry northeast state, New York isn’t what you think of as a solar hotbed. But as the cost of solar equipment declines, homeowners do the math and decide solar makes sense.

Trump’s atavistic hostility toward renewable energy hasn’t killed it. Even though Trump and his fellow Republicans axed most of the green-energy incentives Biden signed into law, most new power generation in the United States is still solar and other renewables. It’s a good example of how progress continues even with troglodytes in charge. Once Trump is out of the way, renewables will rise again.

Enjoy a real cartoon.

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The stock market is very frothy, with sharp selloffs in hot sectors such as semiconductors fueling worries that an artificial-intelligence bubble is bursting and ugly times are nigh, akin to the dot-com bust of 2000.

Nobody knows where stocks are heading, but the current turmoil presents a good opportunity to look at a couple of the trendy trades of recent years. If you get in and out of these trades at more or less the right times, you’ll be fat and happy. But timing is everything, and even the pros struggle to consistently buy low and sell high.

Let’s look first at the semiconductor sector, where the gains have been breathtaking but the recent selloff has brought the whole market lower.

Read more

It wouldn’t look so good. Not economically, anyway.

The Trump economy in 2026 looks substantially weaker than the economy did at the same point in Trump’s first term, in June of 2018. Employment and income growth have been lower during the first 18 months of Trump 2.0 than during the same span in Trump 1.0. GDP growth is lower. Inflation is worse. The only thing that’s substantially better is the overall gain in the stock market since Trump took office.

We track this data as part of our Trumponomics project, which includes data provided by Moody’s Analytics going back to Jimmy Carter’s term in the 1970s. We follow monthly or quarterly numbers on employment, manufacturing employment, incomes, inflation, GDP growth, and stock values, allowing us to measure each of the last 13 presidents against one another at the same point in each term. The full methodology is here, and you can see an interactive version of the data at graphic artist David Foster’s web site.

[The Weekly WTF: Iran mounts stunning come-from-behind comeback]

The data allows us to rank presidents based on the performance of the economy during their terms. The current Trump economy ranks 4th out of the last 7 presidents, which includes all who have held office in the 21st century. In a ranking of the last 13 presidents, going back to Jimmy Carter, Trump ranks 8th out of 13. (For simplicity, we’re only showing data on the last 7 presidents here.)

The Biden economy was slightly better than the current Trump economy at the 18-month point. Biden did better in three categories: growth in employment, manufacturing jobs and GDP. Trump has done better in income growth, stock-market performance and inflation. The statistical edge goes to Biden. But it’s worth noting that 18 months into Biden’s term, in June of 2022, inflation was soaring and voters were rapidly souring on Biden’s economic leadership.

[5 lessons from Trump’s Iran war]

The president before that, of course, was Donald Trump. And the performance of the Trump economy during the three years leading up to the 2020 Covid pandemic may explain why voters gave Trump high marks on the economy when he was running for president again in 2024.

The Trump 1.0 economy ranks 2nd out of the last 7 presidential terms at the 18-month point, mainly because most things were going right. Growth in employment, incomes and GDP was solid. Inflation was modest and a surge of energy production caused by the fracking revolution kept gasoline prices low.

When Trump took office in 2017, he inherited an economy in the midst of a slow but sustained recovery from the Great Recession, which ended in 2009. By the latter half of the 2010s, the economy was back on its feet and many Americans felt like they were getting ahead.

Trump dabbled with tariffs during his first term, but they didn’t arrive until his second year in office, with the heaviest tariffs coming during his third year. Even then, they were pretty mild. The average tax on imports rose from about 1.5% to 2.8% during the entire term. That wasn’t high enough to do much economic damage.

[Here’s the real problem with Elon Musk’s SpaceX]

Trump went much further, much faster, during his second presidential term. By April of 2025—his third month in office—Trump announced tariffs that pushed the average import tax to nearly 28%. Legal challenges and Trump’s own backpedaling have brought the average tariff rate down to about 9% now. But that’s still the highest average tariff in at least 50 years, and it helps explain a weaker economy.

The Iran war Trump launched on February 28 has been another stiff headwind for the economy, forcing businesses and consumers to grapple with soaring energy costs and much more uncertainty than usual. Energy costs are receding amid a shaky ceasefire, but a new risk premium in oil prices could keep energy prices higher than necessary indefinitely. Tariffs and the energy shock are probably holding back hiring and investing in much of the economy, as CEOs wait to see how disruptive Trump’s policies will be.

Trump defenders argue that there’s no recession in sight, so Trump’s rambunctious governing style hasn’t caused any harm. But that’s not quite right. The artificial-intelligence boom is providing an unusual boost to the economy, and that’s masking a lot of weakness elsewhere. Economist David Rosenberg of Rosenberg Research points out that tech, health care and financial services are the only sectors of the economy growing. The rest of the economy is shrinking.

Voters elected Trump to a second term in 2024 largely because they thought he’d do a better job managing the economy and especially getting prices down. That may have been because they remembered Trump’s first term as a pretty good time, setting aside the Covid pandemic.

Trump’s standing on the economy has collapsed, as his tariffs and Iran war sent prices up, not down. Many Americans see recession in their midst and think the country has gone far off track. Biden never recovered when inflation sent his approval rating into the basement, and Trump probably faces the same fate.

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Wall Street parsed every word, gesture, and unstated inference when Kevin Warsh made his debut on June 17. The new Federal Reserve chair has vowed to “reform” the central bank by cutting back on guidance about what the Fed might do, reducing its footprint in financial markets, and focusing more on keeping inflation low. There was a modest stock-market selloff after the Fed concluded its latest policy meeting on June 17, as Warsh and his fellow monetary mandarins indicated they might have to raise interest rates this year.

The Fed’s hints at rate hikes were something of a surprise, since President Trump, who nominated Warsh for the job, has pushed hard for a Fed chair who will lower rates, not raise them. But Warsh’s first concern isn’t Trump, or even the overall US economy.

It’s Iran.

The only reason the Fed might have to raise rates this year is that Trump’s war with Iran caused a global energy crisis, pushing the cost of oil, gasoline, and many other commodities substantially higher. That, in turn, pushed the overall inflation rate from an almost normal 2.4% before the war to a worrisome 4.2% now.

[The Weekly WTF: Iran mounts stunning come-from-behind victory!]

Read more

Iran … won? That’s the conclusion of a wide spectrum of pundits and analysts now that President Trump has signed a “memorandum of understanding” with Iran to end the war Trump launched on February 28. Here’s a sampling:

“Iran is a bigger defeat than Vietnam” (Foreign Policy)

“Iran has Trump ‘by the balls’” (news site Zeteo)

“Trump’s MOU: Surrender on paper, spin on cable” (Economist Brad DeLong)

“Hawks lament disaster on Iran” (The Hill)

“America has lost its war with Iran” (The Independent)

“Iran wins” (former UN Ambassador Nikki Haley)

A lot of this criticism comes from Trump’s fellow Republicans, who are dismayed that Trump seems to be giving Iran a pathway to rebuild its wrecked military, maintain its nuclear weapons program, resume oil sales, and basically carry on as the same terror-sponsoring bunch of thugs they’ve been for decades.

The MOU, which is not in itself a peace deal, does the following, assuming both sides abide by it:

• Ends the fighting

• Reopens the Strait of Hormuz for 60 days

• Ends the US blockade of Iran, meaning Iranian oil exports resume

• Glides over Iran’s nuclear weapons program

• Lifts all sanctions on Iran

• Unfreezes all Iranian assets

• Establishes the possibility of a $300 billion reconstruction fund to help Iran rebuild from the war

Is this a better deal for the United States than if there had been no war at all? What an inconvenient question. Without the war, sanctions on Iran would remain, Iranian assets would still be frozen, the Strait of Hormuz never would have been closed, and there would have been no energy crisis or resurgence of inflation. Trump doesn’t want you to think about any of this because his war looks like a debacle that could end up empowering Iran without making the United States better off.

But the reality of the MOU is that it’s mostly a fig leaf allowing both sides to avert looming economic disaster, with months or years of haggling ahead. Iran’s not going to give up its nuclear weapons program, but it probably doesn’t want to endure another withering aerial attack by the United States and Israel. So the nuclear material buried under rubble will probably just stay there for a while.

Trump has to get oil and gasoline prices down before real shortages start to wreak havoc. The $300 billion reconstruction fund for Iran will probably never materialize. The 60-day deadline for an actual peace deal will probably get extended indefinitely, maybe for the rest of Trump’s presidency.

It’s an epic failure for Trump, who failed to anticipate the asymmetric leverage Iran’s overmatched theocracy could gain by closing the Strait of Hormuz. Trump looks like an idiot and so does his Defense Secretary, Pete Hegseth.

But worse than Vietnam? You’ve got to be kidding me. That war killed nearly 60,000 Americans and as many as 4 million Vietnamese civilians. It wrecked American power and prestige for nearly three decades. The US-Iran war was one man’s arrogant folly, entailing 13 American deaths and probably hundreds of dead Iranian civilians. It’s a tragic screw-up, but not an enduring national nightmare for the United States.

Markets, meanwhile, are overjoyed at the end of hostilities, even if Iran will live to terrorize another day. Oil and gasoline prices are heading back toward pre-war levels and stocks are rising. Iran’s rising stature as a survivor of American bombardment could still roil the Middle East. But if gas prices drop back to $3, most Americans don’t really have to care. Trump, meanwhile, probably hopes the next president who has to deal with a belligerent Iran isn’t him.

Library smackdown. Barack Obama’s presidential library opened June 19 in Chicago, and Trump can’t stand it. He’s been trashing the library on social media after calling it a “disaster” last year, well before it opened. A presidential-library expert told the Washington Post, “a president taunting another president about his library isn’t something that has previously happened.” Another first for Trump!

The current president plans to install his library in a 47-story skyscraper in Miami, with the number of floors matching the rank of the president. Wait, sorry, 47 matches the chronological rank of Trump’s presidency, not the qualitative rank. But it might end up representing Trump’s qualitative rank, as well.

One unique feature of Trump’s library will be a hotel, so you can stay for a week or a month if you really want to bask in Trump’s presidency. When you go, make sure to allot plenty of time for the Iran war display.

Make Algae Great Again. How much do you normally think about the reflecting pool in front of the Lincoln Memorial in Washington, DC? Never? Me too. Until now. Trump decided to “fix” the pool by giving two friendly firms no-bid contracts to paint the bottom of the pool blue and get rid of algae that has been a nuisance in the stagnant water for nearly 100 years. But the algae is back, the new blue paint is already flaking off, and everybody who visits the DC monuments now checks out the pool to see how the algae is doing.

The algae is triumphant. Federal workers are still pumping fetid green water out of the pool. Imagery companies are now training satellite cameras on the pool to document how the algae flummoxes federal workers trying to scrape it off the bottom and kill it with hydrogen peroxide. Trump has blamed his predecessor Joe Biden for the “filthy” state of the reflecting pool, but the algae seem apolitical. Maybe Trump should sign a Memorandum of Understanding with the algae.

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SpaceX may set the stage for two more giant IPOs that are coming soon, the artificial-intelligence companies Anthropic and OpenAI. The same indexes that let SpaceX in the side door will probably do the same for Anthropic and OpenAI, generating some forced buying of those shares, too. None of these three companies is profitable, or likely to be any time soon. Yet the insiders will likely amass gargantuan fortunes regardless of how well their companies perform.

In an age of worsening wealth inequality, maybe it’s natural that there’s growing populist hostility toward these AI overlords. But this isn’t the main story. The AI boom, so far, has lifted the entire stock market, boosting portfolio values for just about anybody who owned stocks during the last three years. The giant newcomers won’t move markets very much for months, and maybe years. There are bigger threats to markets, meanwhile, than Musk’s intergalactic wealth, no matter how obscene it might seem.

I spoke recently with Dave Nadig, President of ETF.com, to get some ground truth about the indexes bending their rules to accommodate SpaceX, the risks for ordinary investors, and where we might be in the AI boom (or bubble). The full video is below, followed by a bullet-point summary of the conversation—which came from human intelligence, not its artificial knock-off. 😁

Beware the “GameStop problem.” Nadig worries about a huge company like SpaceX being valued like a meme stock, with little connection to underlying performance. “I worry about the GameStop problem,” Nadig says. “What happened in GameStop had nothing to do with the company and everything to do with vibes. SpaceX is in that exact same boat. Having a lot of value tied up in vibes means you can get really weird stuff going on in the market. SpaceX could report a terrible quarter and the stock could go up 100% and everybody would go, ‘the whole market’s broken.’”

[See why most Americans are missing out on an epic stock-market boom]

SpaceX isn’t big enough to roil markets, yet. While the market values SpaceX at around $2 trillion, only about $100 billion of that is stock trading in public markets. The rest is still privately owned. But much of the company will ultimately trade publicly, as restrictions on insider selling expire and those stockholders sell. That’s when SpaceX might be big enough to rock the overall market. GameStop’s average market value during its meme-stock era has been around $10 billion. So SpaceX’s value could be 200 times that of the most prominent meme stock. That would be a different order of problem.

Markets may treat Anthropic and OpenAI differently than SpaceX. The two AI giants might not get the same valuation pass that the Musk mystique seems to generate. I asked Nadig if he thinks investors might treat the two AI giants like meme stocks. “I suspect not. And I hope not,” he said. “I suspect both of those will be treated like normal companies as opposed to weird Elon moonshots.”

[Why Elon Musk is a trillionaire]

Should you be angry about a few stock indexes bending their rules for giant, unproven companies? Probably not. First of all, the S&P 500 index, the biggest of them all, is not changing its rules at all, and it could be years before any of these companies joins that index. Most people with investments in an index fund follow the S&P 500, so there are no issues there.

Other indexes changed their rules because the big investing firms that package index funds—Fidelity, Vanguard, Schwab and the like—generally wanted them to. Allowing in these hot new companies allows those firms to offer some exposure to their own customers. And some investors always want to get in on the hottest new thing.

Should you be betting big on these new companies? Please don’t, unless you have money to burn. Nadig suggests maintaining a “cowboy account” for risky bets that should be no more than 1% of your net worth. “It’s money you’re spending largely for entertainment and psychological value, not because you’re going to get it right,” he says.

[The Weekly WTF: Trump 💖 inflation]

If you do want to experiment with shares of a risky new public company, you may as well just buy a few shares directly through your brokerage, instead of bothering with a targeted fund. Just be prepared to lose. SpaceX will probably hit some major potholes before it launches for good—if it ever does.

If your main source of income is a paycheck rather than an investment portfolio, there’s less to cheer. Job growth is tepid, incomes are falling behind inflation, and housing remains unaffordable. President Trump’s approval rating is sinking because many Americans feel worse off since he took office, not better off.

[Why most Americans are missing out on an epic stock-market boom]

The Pinpoint Press Better-Off Index, which measures the economy compared with one year ago, neatly captures this dichotomy, often described as the K-shaped economy. The latest monthly index sits at 107.3, indicating a 7.3% improvement in a composite that measures changes in employment, incomes, housing affordability and stock values. The average index reading since 2006 is 102.9, so the current economy is better than average.

But stripping out stocks puts the index at 100.3, which is slightly below the long-term average. That indicates basically no improvement at all during the last year in what you might call the real economy. Given that a growing economy with improving productivity should always get a little bit better, this is a very weak performance.

Looking at each metric individually shows where the weakness is. The year-over-year improvement in stock values is robust. But real income, adjusted for inflation, is down during the last 12 months. That’s a combination of modest nominal income growth and inflation that has been rising because of the energy crisis caused by Trump’s war with Iran. Year-over-year inflation is now 4.2%, while income growth during the same period is just 3.5%. Falling real income means the typical paycheck buys less—and the typical worker is pretty aggravated.

Job growth has been steadily slowing since it peaked in 2022. There was solid job growth in May when employers added 172,000 new jobs, following strong numbers in March and April. But there have also been five months of job losses during the last year. Put it all together and the labor market is growing at the slowest pace since the 2020 Covid downturn.

[How older Americans locked up the housing market]

Housing affordability, as measured by the Atlanta Federal Reserve, is slightly better than it was one year ago, mainly because mortgage rates have dropped by about four-tenths of a percentage point. But that’s not making many people feel better because housing affordability is still lousy.

It currently takes 43% of median income to pay for a typical house. The standard for affordability is 30%. Homes have been in the unaffordable range since 2021, mainly because of the huge run-up in home values during the Covid pandemic, when the Federal Reserve slashed interest rates, causing a buying spree. Overpriced housing has become a grueling national problem with no easy fix.

[The Weekly WTF: Trump 💖 inflation]

The economic pain of the Iran war, including soaring gasoline prices, has wrecked Trump’s approval rating. If the war winds down, as Trump clearly hopes it will, a resumption of energy flows through the Strait of Hormuz should gradually bring prices down and reduce overall inflation. So real incomes might turn positive again in two or three months.

That doesn’t mean Trump’s approval rating will improve. When Joe Biden was president and inflation soared to 9% in 2022, his approval rating sank, too. Inflation gradually got better. Biden’s standing with the public didn’t.

[5 lessons from Trump’s Iran war]

What we learned then is that the sting of inflation and lost purchasing power lasts long after the data starts to improve. Voters have long memories, and presidents pay the price.

The two warring parties have supposedly signed a “memorandum of understanding,” with negotiations on precise terms to follow and a signing ceremony scheduled for June 19 in Switzerland. This has the hallmarks of a phony deal. Iran is a notoriously wily negotiator not likely to sign off on details to be named later. A substantive peace agreement could take months to hammer out. There might never be one.

But each side may be tired enough of conflict to kick the can down the road, with the understanding that Iran can once again freely export oil and cargo will start flowing through the Strait of Hormuz. That’s what markets see, which is why Brent oil, which hit nearly $120 per barrel in April, is down to $84.

It’s been a momentous four months. Here’s what we’ve learned:

Trump is capable of colossal blunders (duh). It’s hard to think of a presidential decision in modern times that has backfired more than Trump’s decision to attack Iran on February 28. Trump obviously thought Iran would fold quickly and he’d have a rapid victory, as in Venezuela at the start of the year. Any national-security expert could have told Trump Iran would be a much tougher foe, and some undoubtedly did.

The consequences of Trump’s blunder will be widespread. The Iranian regime’s ability to survive a joint US-Israeli onslaught will embolden Tehran, while proving that America’s vaunted military has limits. At home, Trump’s approval rating has fallen to the lowest level of his two presidential terms, and may never recover. The surge in energy prices, which can only be blamed on the incumbent Republicans, has bolstered Democrats’ chances of taking one or both houses of Congress in the November midterms. There will other long-term repercussions not yet apparent.

Trump failed to displace the Iranian regime (despite what he might claim). The war did nothing to help ordinary Iranians, who are still oppressed by a government most of them hate. Iran still has nearly 1,000 pounds of uranium it can use to build nuclear bombs. Iran has lost a lot of military equipment, and it might be a little more careful in the future about provoking a US or Israeli attack. But it’s hard to see how this war accomplished anything positive and lasting for the United States.

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The energy revolution of the last 40 years has been a lifesaver. The two changes that stand out most are a huge improvement in energy efficiency and the fracking revolution that made the United States the world’s largest oil and natural gas producer.

First, efficiency. The closure of the Strait of Hormuz for four months (or longer) was the biggest disruption ever in oil markets, in terms of the volume of oil blocked from global supplies. Yet oil and energy prices remained far below the levels of past crises, in inflation-adjusted terms.

The US economy is far less “energy-intense” than it used to be, which means we produce more with less energy. That’s the result of efficiency improvements throughout the economy: cars that burn less gas, buildings that require less energy to heat and cool, industrial processes that sip fuel, and technological breakthroughs such as heat pumps. These changes mostly happened incrementally starting in the 1970s, but over time they helped minimize a crisis.

The fracking revolution that started around 2010 now allows American drillers to serve as “swing producers” able to generate more oil when markets are tight. US oil production has crept up to record highs and is likely to rise further into 2027. Exports of petroleum products surged in April and May. That doesn’t insulate Americans from price hikes, but it demonstrates that a Middle East energy crisis won’t bring the US economy to its knees as it did twice in the 1970s.

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Green energy is back. Environmentalists dismayed by Trump’s hostility toward green energy suddenly have something to cheer about. The Strait of Hormuz oil crisis has fueled more solar and wind power production nearly everywhere in the world … except the United States. China, the world’s leading producer of solar-power equipment, is exporting more solar components than ever to dozens of countries. The higher cost of fossil fuels, and the prospect of a sustained crisis in the Middle East, make renewables more cost-competitive at the same time those costs have been plummeting.

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Even here, where Trump is going out of his way to block green energy, renewables account for most of the new power generation added to the grid. Trump has canceled many federal incentives for green-energy development, but many states are promoting renewables, which are taking off even in Texas. The growth rate of renewables in the United States has declined, largely because of Trump’s resistance. But investment is still solid. A few years from now, Trump’s crusade against green energy will look like a dunderheaded effort to block the inevitable, with his Iran war marking an important pivot point in favor of renewables.

More big changes are coming to energy markets. Iran has newfound leverage over Persian Gulf energy shipments, but the value of that leverage is probably already declining. That’s because markets are already adapting to the prospect of a single energy hegemon dictating Persian Gulf prices and outcomes.

Saudi Arabia has been bypassing the Strait of Hormuz chokepoint and exporting oil through a pipeline that ends at the Red Sea. The UAE has been exporting oil through a pipeline that reaches the Gulf of Oman, outside the Persian Gulf. These have turned out to be vital workarounds allowing some Persian Gulf oil nations to get some of their product to market.

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There’s now a flurry of projects underway to build more workarounds, via pipelines to the Gulf of Oman, the Red Sea, and the Mediterranean, and even trucking routes out of the Gulf that were once thought laughably inefficient. The Strait of Hormuz will remain a crucial cargo passageway, if Iran lets the cargo pass freely. If it doesn’t, the oil nations will find other ways. This will probably happen at other key global chokepoints as well.

Iran will remain a Middle East troublemaker. Don’t believe any Trump statements about how the United States “won” the Iran war or how agreeable the Iranian government suddenly seems. It’s the same group of militant theocrats who want a nuclear bomb, “death to Israel,” and all the grisly perks that come with a dictatorship. Trump once said he “fell in love” with North Korean dictator Kim Jong Un, who eight years later may represent more of a risk to the United States than ever. Let’s hope he doesn’t fall in love with any more tyrants.

The most likely outcome of the Iran war is not a peace deal that tidies everything up and puts all the pieces back together, but an ongoing state of tension in which neither side buckles and nobody’s sure what will happen next. The good news is that markets can probably live with that. The bad news is that Trump will be running the show for the foreseeable future, with future blunders always possible.

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The most important development in financial markets right now isn’t in the headlines: Things are getting back to normal.

Here’s what is in the headlines: Elon Musk is the world’s first trillionaire. His rocket company SpaceX blasted onto public markets with a staggering $2 trillion valuation. Musk’s stake is worth more than $800 billion, with his ownership in Tesla bumping him over the trillion-dollar threshold. Capitalists cheer; Musk-haters jeer.

The Iran war devolved to shooting again, with Iran downing a US helicopter, US forces retaliating and Iran re-retaliating. Then there was talk of a peace deal, for at least the 38th time.

President Trump’s war with Iran has pushed inflation to the highest level in three years. At the start of the year, investors thought the Federal Reserve would be cutting interest rates in 2026. Now it looks like they’ll have to raise rates, to combat inflation. The change in expectations has already pushed mortgage rates up by half a point, making housing affordability worse.

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And yet: Markets are calm. Iran war drama seems to be fading. And it’s possible the second half of 2026 will be less volatile than the first.

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