Hello Capitalists,

Here’s what you need to be paying attention to today:

• Trump demands Fed Gov resign over mortgage fraud

• Another weak jobs report as Powell still won’t cut rates

• Palantir’s woes continue

• The Marxist and the Banker have a phone call

• It’s lights out for wind and solar as Trump pulls the plug

Today’s markets:

• DOW: 44740.93 - (⬇️0.40%) 🔴

• S&P: 6455.83 - (⬇️0.17%) 🔴

• NASDAQ: 21692.06 - (⬇️0.10%) 🔴

• CBOE VIX Volatility Index: $15.17 (⬇️04.76%) ⚠️⬇️

Trump demands Fed Governor’s resignation amid mortgage fraud allegations

President Donald Trump demanded Federal Reserve Governor Lisa Cook’s immediate resignation Wednesday, amplifying mortgage fraud allegations from housing regulator Bill Pulte, escalating his campaign to pressure the central bank.

• Pulte’s Criminal Referral: Bill Pulte, FHFA director, sent a letter to Attorney General Pam Bondi alleging Cook falsified mortgage documents for properties in Michigan and Georgia to secure favorable loan terms.

• Trump’s Broader Strategy: The allegations against Cook align with Trump’s ongoing pressure on the Federal Reserve, particularly targeting Chairman Jerome Powell, to lower interest rates amid concerns over economic policy.

• Similar Investigations Launched: The Justice Department is also probing mortgage-related allegations against Sen. Adam Schiff and New York AG Letitia James.

• Legal Constraints Noted: The Federal Reserve Act of 1913 limits presidential power to remove Fed governors..

Quote of the Day:

Another weak jobs report turns up the pressure on Powell for his stubborn refusal to cut rates

U.S. jobless claims surged to 232,000 last week, a four-month high, increasing pressure on Federal Reserve Chair Jerome Powell to cut interest rates amid stifled hiring and deepening labor market woes.

• Continuing Claims Climb Steadily: Ongoing unemployment claims hit 1.88 million, the highest since November 2021, signaling Americans are struggling to find new jobs in a cooling market.

• Hiring Slows Amid Uncertainty: Businesses, wary of high interest rates, are hiring less, with economic uncertainty further dampening job creation despite low layoffs.

• Powell In The Hot Seat: Powell’s persistence in maintaining high interest rates as the US shifts its economic focus to on-shoring has helped drive the labor market slowdown.

• Regional Spikes Raise Concerns: States like Michigan and California saw significant claim increases, hinting at localized economic pressures impacting the national labor landscape.

AI developer Palantir’s woes continue as short sellers claim it is “detached from fundamentals”

Palantir’s stock plummeted 20%, entering bear market territory after a six-day slide, driven by a broader market sell-off and a critical short-seller report questioning its AI-fueled valuation.

• Short-Seller Sparks Debate: Citron Research’s report labeled Palantir’s valuation as “detached from fundamentals,” comparing it unfavorably to OpenAI’s, intensifying scrutiny on its high price-to-earnings ratio.

• AI Boom Drives Growth: Palantir’s recent $1 billion revenue quarter, boosted by AI demand and government contracts, had propelled shares to record highs before the sharp decline.

• Market Context Worsens Slide: The stock’s longest losing streak since April 2024 coincided with a broader tech sell-off, reflecting investor concerns about overvalued AI-driven companies.

• Valuation Concerns Persist: Despite strong performance, Palantir’s forward P/E ratio exceeding 245 times raises questions about sustainability compared to tech giants like Microsoft and Apple.

JP Morgan CEO Jamie Dimon held a call with “Marxist” Mamdani

JPMorgan CEO Jamie Dimon, after branding NYC mayoral candidate Zohran Mamdani a "Marxist," held a call with the democratic socialist.

• Mamdani’s Controversial Platform: Zohran Mamdani’s proposals, like a $30 minimum wage and city-owned grocery stores, spark concerns among NYC business leaders fearing economic fallout.

• Business Community Mobilizes: Wall Street executives, wary of Mamdani’s policies, back a $20 million anti-Mamdani campaign to support centrist candidates.

• Facilitated by Wylde: Kathryn Wylde, CEO of Partnership for NYC, arranged Dimon’s call and other business leader meetings to bridge gaps with Mamdani.

• Dimon’s Broader Critique: Dimon criticized Democrats’ DEI focus, calling it impractical, while praising Mamdani’s engagement despite ideological differences. Dimon called Mamdani "more of a Marxist than a socialist" adding, "he's pointing out some real problems, affordable housing and grocery prices,” but that he is pushing “the same ideological mush that means nothing in the real world."

• Further details of their call have not been reported

Trump turns out the lights on wind and solar projects

President Donald Trump declared Wednesday that the U.S. will halt approvals for solar and wind projects, escalating his attack on renewables.

• Tightened Permitting Rules: Trump's administration has tightened federal permitting for renewables, with Interior Secretary Doug Burgum now holding final approval authority.

• Tax Credit Phaseout: The One Big Beautiful Bill Act terminates wind and solar tax credits by 2027.

• Farmland Policy Shift: The U.S. Department of Agriculture ended support for solar on farmland, aligning with Trump's view that such projects harm farmers.

British Government urged to get its act to together and develop a national Stablecoin plan

Crypto giants like Coinbase and Kraken are urging the U.K. to craft a national stablecoin strategy, warning that regulatory lag could cede global financial leadership to the U.S. in the $280 billion digital asset race.

• Stablecoin Market Disparity: The global stablecoin market exceeds $280 billion, but U.K. pound-pegged stablecoins lag at just £461,224, highlighting Britain's limited presence in this sector.

• Regulatory Concerns Raised: Industry leaders criticize the U.K.'s vague stablecoin definition, arguing it focuses on form over function, risking stifled innovation and economic disadvantage.

• Economic Opportunities Touted: A national strategy could boost U.K.'s financial hub status, generate new revenue streams, and increase demand for gilts via digital channels.

• Stablecoin Risks Noted: The 2022 Terra-Luna collapse exposed vulnerabilities, with HSBC’s Daragh Maher emphasizing stablecoins’ potential to bridge traditional finance, but regulatory hurdles persist.