And no boys and girls, it was not the million plus donated to the “inauguration fund” by Apple CEO Tim Cook.
The past 24 hours has presented the usual suspects with the political and market theory ideas why Trump capitulated on can be rightfully called the “Apple Exemption” in his tariff policy towards China, granting broad exemptions that appear to benefit a select group of companies that weirdly enough have been donating money to the GOP and President Trump plus contacting him long after he became Commander-in-Chief.
However, that is not the reason for the 90 day pause, the Apple exemption, or the double talk from the various administration representatives and leakers.
To my readers and those of any logical thinking capabilities, these big 5 reasons listed below are why Trump folded like a dress shirt in a Chinese laundry.
1. JP Morgan Chase
A sharp, hard decline from 279 to 208, a move of over 24% tends to get Mr. Dimon on the phone with Treasury Secretary Bessent pretty darned quick.
2. Morgan Stanley
Not as large as JPM, but just as important and also getting zapped some 29.5% since the coronation of El Trumpo:
3. Citigroup
A bank that should have been liquidated in 2009 continues to function as a major institution in the US despite some seriously questionable strategies since that era. Perhaps the Trade War will give it the opportunity to finally be put out of its misery.
4. Goldman Sachs
There is a lot of pain coming from 200 West Street in New York. And as a systemically critical institution the screams of agony carry almost as much weight as Dimon’s calls to the White House last week. As a major player in US and global credit markets, the idea that this bank could be facing some stress outside the norm should be enough for Trump to fold.
5. Bank of America
Also known as Stank of America for the reeking smell of their books. The surreal drama extends far beyond the “implied” unrealized losses that everyone thought would be their undoing. Unfortunately for the Federal Reserve and US government, this bank is quite systemically important, especially after its marriage to Merrill Lynch during the GFC.
There are the five reasons that Trump yielded on the 90 day suspension and call for negotiations. The weekend view will be that it was to save Apple and Nvidia, but there is a major reason these banks are so important.
From the Financial Stability Board in Basel, Switzerland, the current list of globally systemic banks relating to these institutions listed above:
Remember this fact moving forward folks. It’s not always the flashy tech company or its boob signing CEO, or a Presidential “tweet” or speech.
Often, as in the recent past, it comes down to the Too Big to Fail group which is holding this entire jumbled mess together, in ways the average citizen has no clue about.
