NACHO, NACHO Man
Wall Street bets Strait of Hormuz stays closed and gasoline prices will sting all summer long
This Week In Blunders – May 4-9
“We will frack, frack, frack, and drill baby drill. I will cut your energy prices in half within 12 months.” – President Donald Trump, Oct, 18 2024
Wall Street traders have cooked up a new Mexican delight. This time it’s NACHO instead of TACO.
TACO, an acronym for Trump Always Chickens Out, was Wall Street’s rationale for bidding stock indexes to record highs despite Trump’s wavering tariff threats.
NACHO is another call.
It stands for “Not A Chance Hormuz Opens,” a growing market wager that the Strait of Hormuz disruption is not a temporary panic but the beginning of a prolonged energy shock.
“NACHO is an acknowledgment that higher oil isn’t a temporary shock to trade around, it’s the current market environment,” one market analyst told CNBC.
President Donald Trump can keep prattling about winning the war, ending the war, opening the Strait, but Wall Street is now betting that the world is stuck with $100 oil for the foreseeable future.
Gas pump prices seem to be the one economic metric everyone understands. They directly impact household budgets and eventually raise the price of just about everything.
If there’s anything voters may still hold politicians accountable for, it’s gasoline prices.
That’s why Republicans have always loved to blame Democratic Presidents for higher gasoline prices, and indeed the two records came under Presidents Obama and Biden.
On July 17, 2008, the national average hit $4.11. The causes included rising demand from China and other emerging economies, tight global supplies, a weak U.S. dollar, and heavy commodities speculation.
Then on June 14, 2022, it hit a new record of $5.02. The causes were Russia’s invasion of Ukraine and rebounding post-pandemic demand.
Today we are at $4.53, the AAA reports, and a single cause is abundantly clear.
The Strait of Hormuz, where the world gets 20% of its oil, is closed because Trump unilaterally started a war with Iran that he can’t conclude on the time table he initially promised.
It’s already led to the loss of a billion barrels of oil production per day, it’s getting worse every day, it will take a long time to recover, Shell CEO Wael Sawan told investors on Thursday.
Trump loves to put his name on everything. So perhaps in November, voters may be tempted to call it what it is: Trumpflation.
We haven’t even begun the summer driving season yet, so all this Trumpflation is likely to drive gasoline prices higher still.
Trump has already topped Obama’s record gas price and now he’s gunning for Biden’s.
Before Trump struck Iran, analysts were forecasting gasoline prices to average below $3 this year. Now it could be more like $5.
To be fair, these are nominal comparisons. In inflation-adjusted dollars, gasoline would have to rise above $6 to eclipse the pain of previous price shocks under Biden and Obama. But don’t rule that out. Pump prices are already averaging over $6 in California.
For many Americans, it may be best to stay home this summer. And eat a NACHO.
Fifty Shades of JPMorgan Chase
Someone at America’s largest bank is a freak.
It’s either Chirayu Rana, a former vice president at JPMorgan Chase, or it’s Lorna Hajdini, an executive director.
I needn’t list all the lurid details of this scandal because they are splashed all over everywhere – from viral social media posts and sketchy AI memes to the headlines in major newspapers, including the front page of today’s Wall Street Journal.
Rana claims Hajdini drugged and raped him and basically tried to turn him into a sex slave.
Hajdidni denies any sexual or romantic relationship, let alone this kind of smear.
JPMorgan Chase says it has investigated Rana’s claims and found no evidence to support them, yet it offered him $1 million to quietly go away.
But Rana isn’t quietly going away. And for now the only certainty is that JPMorgan Chase has a major PR crisis on its hands.
The lines Rana says Hadjdini allegedly uttered are so damn freaky it’s difficult to believe a highly paid Wall Street executive would say them – or, in the alternative, fabricate them in a lawsuit for the entire scandal-loving world to dissect.
Or is it?
From Jeffrey Epstein to yet another Wall Street sex-capade, the people at the top of our economic system keep confusing their outsized wealth with immunity.
Read More: Banking On Epstein (Business Blunders)
Another banker behaving badly
An update on small-town bankster Danny Seibel, 55, who drove a century-old small-town bank to insolvency with reckless lending to friends, casino gambling and allegedly doctored books.
The former CEO of the failed First National Bank of Lindsay, Okla., pleaded guilty to a single count of bank fraud on Thursday. He faces up to 30 years in prison and a fine of up to $1 million.
The bank had served its community of nearly 3,000 people since 1902 and once boasted $108 million until … him.
At least Seibel was smart enough to know that he was going down when he realized that he may have sent suspiciously conflicting reports to regulators.
Here’s what he texted another bank employee in June 2024, according to the indictment against him:
“I think I’m nailed to the wall now I [g]ave them a report that [is not] the same as what they got now and they have both. Nobody’s fault but my own. Also, delete these texts.”
Read More: Small Town Bankster (Business Blunders)
For your daily dose of What Not To Do In Business, join the Business Blunders community on: Substack – LinkedIn – Facebook – X