Market complacency – Rubicon crossed in America

In my view, the financial market’s complacency has me deeply worried. The focus has been on Trump tariffs. This is the second time Trump has attacked the machinery of government. He tried to freeze existing spending by executive order. Quickly backtracked on that after 48 hours. You can read more here, here and here. Days later, Elon Musk’s minions have taken control of US treasury computer systems. Read more here, here and here. Taking over control of the machinery of the US government to control spending. Congress may have passed spending laws, but Musk can refuse to send the money. Unelected officials with no security clearance got control over America’s bank account. It amounts to a 21st-century coup. Purging officials who resist, who he does not agree with. Which was both efforts to control the purse is illegal and unconstitutional. Yet the market reaction is this is fine.

Thought experiment: what would the global reaction be if this was another country? Outrage and punishment. Investors would be leaving on mass. The money would be flying out the doors. A bank run would most likely happen. This is beyond the imagination. It is not hard to see how the lack of pushback leads to Trump continuing, perhaps expanding his actions. Of course, even if this is temporary, the rubicon has been crossed. Passed the point of no return on a couple of norms. Elected officials should be worried. The most extreme outcome is the withholding of funds for support. Trump wants a constitutional change, no dollar until you support it. What happens if the other side uses these powers? White House can bully whoever to do its bidding. They have been bypassed, willingly given up power.

Struggling to understand the muted market reaction. Worst still Trump said he going to do this. Yet nobody believed him. Now he done it people have just shrugged. Coup de grace has happened yet nobody reacted. Only four groups that can stop Trump now. His cabinet can depose him. Congress and senate with supreme court are meant to act. Yet they are unlikely. Given the political risk and uncertainty surely that enough for markets to move? Money men something Trump claims to focus on are not moving. That is puzzling.