… Treasury Secretary Scott Bessent held his major press conference today to announce what was hyped as an “economic D-Day” to crush Iran once and for all after sanctions, bombing, blockades, peace negotiations and threats failed to do the job.
… If you were expecting Bessent to list specific actions being taken against specific countries and companies doing business with Iran, you were probably pretty disappointed. What we got from Bessent today was not so much a D-Day invasion but a warning that an economic D-Day might happen. Eventually. Someday. Maybe.
… Before the press conference, Bessent posted:
“President Trump has dismantled Iran’s military capabilities, destroyed nearly 100% of its military factories, and buried its nuclear program. We are now entering the endgame. At dawn begins an economic D-Day - the single greatest financial offensive ever marshaled against an adversary.
The Islamic Republic has subsisted by dressing extortion as security guarantees. It has drawn strength from a calculus that regards Iranian retaliation as certain and American enforcement as negotiable. Under Trump, that era is over. And those who fear the danger of defying Tehran ought not to discount the cost of testing Washington.
The President has created the conditions to leverage every agency, every authority and action many assumed we would never summon. Our objective is to sever every economic lifeline that sustains the tyrannical regime until Tehran stands alone.”
… From the press conference:
Q - “What specific secondary sanctions or penalties is Treasury prepared to levy against Chinese banks and shipping firms if they do not comply? Bessent: Every entity should know that they should be prepared to face US sanctions. No one should test our resolve.”
Q - “We don’t see any Chinese banks or institutions targeted here. Is that something which is coming? Bessent: No one is above the reach of US sanctions. Anyone who is part of the Iranian ecosystem, they will be targeted. The best way to engage with countries right now is quiet diplomacy.”
… What a surprise that Scott Bessent’s all-out “economic D-Day” to sanction countries and companies doing business with Iran excludes the Chinese, Iran’s largest trading partner. But I knew there was no way they were going to do anything against the Chinese before President Xi comes to Washington next month.
Q - “You described this as an economic D-Day, but D-Day wasn't a threat of an invasion and the US didn't give a timeline to Germany. So why not impose the sanctions today? Bessent: Why would I want to blow up the global financial system?”
… You can’t have an “economic D-Day” against Iran with secondary sanctions without including China and India. Nothing Bessent announced or said is truly meaningful without including Iran’s largest trading partners, and it is doubtful the Trump admin will do anything against them.
“We do not take the use of secondary sanctions lightly. So we believe that a ‘warning shot’ is appropriate. And if people don’t want to meet our expectations, then they should expect to leave the dollar system.”
"Q - Does Trump still want Canada to become a state? Bessent: I think he would like Canada to come to the table and negotiate in good faith. They were offered quite a good deal last week. They chose to reject it. Unfortunately, Mark Carney rose to power on an anti-American, anti-Trump platform. I think one has to ask, is he trying to benefit himself, the Liberal Party or the Canadian people.”
… Imagine a member of a Trump cabinet accusing Carney of rejecting this deal because that supposedly benefits him personally. From the most self-dealing US admin in history.
Bessent to Iranian troops: “To the ordinary soldiers supporting this regime as more and more of your paychecks stop or supposedly just delayed, ask whether your commanders are leading your country to triumph or to ruin, and recall that the Berlin Wall fell when ordinary soldiers decided not to shoot at their own people.”
… I guess this time we aren't promising that we are "locked and loaded" to come to their rescue if they rise up like Trump promised protesters 6 months ago then sold them out and did nothing.
… French economic and geopolitical analyst Arnaud Bertrand: “The same Bessent who deluded himself into thinking back in April 2025 that all countries would join the US in a ‘grand economic encirclement’ of China, only to fold a few weeks later because no-one joined.
… Now he’s recycling the same script against Iran and it’s even more deluded because it requires the cooperation of China - the very country he tried and failed to isolate last year - and China is obviously refusing. You couldn’t make this up.”
… Trump posted this morning: “IRAN IS COMPLETELY COLLAPSING!!!”
… Trump also posted the same thing over 4 months ago on April 21: “Iran is collapsing financially! They want the Strait of Hormuz opened immediately - starving for cash! Losing $500 million a day. Military and police complaining they are not getting paid. SOS!!!
… Iranian Parliament Speaker MB Ghalibaf: “Americans know that no one buys their bombast; the US is not in an economic position to further restrict its relations with other countries. Iran’s trading partners, both in the media and through messages sent to us, have made it clear that they don’t take these statements into account anywhere.”
… Dr. Mohsen Rezaee, Iran’s new secretary of the Supreme National Security Council: “If the economic war continues, not a single drop of oil will be exported - neither through the Strait of Hormuz nor from anywhere in the Persian Gulf. Iran will regard any country’s participation in or support for America’s economic war against the Iranian people as an act of war.”
… WSJ: “Scott Bessent’s mission to tame the bond market could get help from another Trump admin push: crypto legislation. Last week, the Treasury announced larger buybacks of longer-term bonds. That can be funded by increasing issuance of shorter-term Treasury bills, or what Bessent called a Treasury twist. In that context, it is notable that Bessent has in the past talked about a big potential new source of demand for Treasury bills: stablecoins.”
… “The connection is that under the Genius Act—the crypto regulatory law passed last year—stablecoins issued in the US that aim to stay fixed to the value of the dollar can back that promise only with certain assets, including Treasurys that mature within 93 days.”
… “Today, the market value of all stablecoins is around $300 billion. That is still pretty small in the grand scheme of things: US money-market funds are close to $8 trillion. But Bessent has in the past cited projections that stablecoins could grow into a nearly $4 trillion market, and written that ‘this could lower govt borrowing costs.’”
… CNBC: “The Treasury could use its near $1 trillion General Account to help fund its recently announced plans to increase purchases of govt bonds, according to two senior Treasury officials. Using the TGA would provide the Treasury with considerable firepower to influence long-term bond yields. The Treasury surprised markets last week with an announcement that it would be doubling the size of buybacks of off-the-run securities on the long end from $2 billion to at least $4 billion.”
… “However, the Treasury made no mention of how it would fund the purchases. Most market participants assumed it would do so by selling short-term bills. The senior Treasury officials did not rule that out. Bessent called the operation a ‘Treasury Twist,’ a reference to a govt or Fed Reserve operation where long-term Treasurys are bought and paid for with short-term issuance. That also implied that short-term bonds would be sold.”
… “But since the surprise announcement, bonds have retreated from an initial rally, sending yields higher, in part because of skepticism voiced by many market analysts about how effective the operation would be and whether the Treasury’s resources were too limited.”
… “Using the TGA could change that perception. The TGA is essentially the govt’s checking account, a rainy day fund of sorts held at the Federal Reserve. It is already funded with existing tax collections. Bessent has built up the TGA to around $950 billion currently, compared with the Biden admin balance of around $550 billion to $600 billion.”
… “The officials would not say how much, if any, of the TGA would be used or when such an announcement could be made. But they were clear that it is considered to be available. The TGA’s size is discretionary. When Janet Yellen ran the Treasury, officials said the goal was to set the TGA at a ‘week ahead of cash needs.’ The current Treasury says it sets the account ‘consistent with Treasury’s long-standing cash balance policy.’”
… Market analyst Charlie Bilello: “Instead of cutting spending and reducing deficits, Washington is considering using nearly $1 trillion from the Treasury General Account to suppress bond yields. Step 1: Create the problem. Step 2: Refuse to fix the problem. Step 3: Manipulate the market to hide the problem.”
… “We’re borrowing trillions, driving interest rates higher in the process, and then using Treasury’s cash (funded in part by that borrowing) to buy back the debt in an attempt to push those rates back down. This is what happens when you refuse to get your fiscal house in order.”
… Economist Peter Schiff: “Bessent’s plan to use the TGA to fund Treasury buybacks makes possible exactly what I warned would happen. This reckless plan will substantially shorten the average maturity of the national debt, increasing our exposure to rising short-term rates and making it even harder for the Fed to hike rates without exploding interest expense and budget deficits. It’s a recipe for massive quantitative easing and runaway inflation. Got gold?”
… Why do I feel like we have Bernie Madoff in charge of the US Treasury?
… JD Vance was in Maine doing a campaign stop for Susan Collins for the second time. However, both times Collins was sadly “unable to attend.” Collins doesn’t even want to be photographed with Trump or Vance right now let alone share a stage with them.
“To the PM of Canada, stop taking advantage of the people of Maine. Stop taking advantage of America. It's over.”
… Trade with Canada is hugely important to the Maine economy and nobody in Maine blames Carney for the current trade war.
“Canada is a country that has underinvested in its military that quite literally would get invaded by a foreign country were it not for the umbrella of protection provided by the USA.”
“If you bring in millions and millions of illegal aliens, you got to put them somewhere . And when you give them houses that ought go by right to American citizens, that’s going to increase the cost of housing.”
… Over 90% of towns in Maine have 0 immigrants. We do not have many statewide. There is not a single person in Maine paying more for housing because of our handful of immigrants.
On the ICE murder in Biddeford: "When the officers approached the person they were trying to arrest, that person, like, broke away from the scene, and what at least the law enforcement officers argue is that person posed a danger to the community. When I look at the case what I see is a country that's trying to enforce its laws.”
… People in Maine are overwhelmingly outraged by that shooting. Susan Collins hasn’t even tried to defend it.
… Rep. William Timmons (R-SC) on Newsmax: Q - What is your confidence level in senate nominee Darline Graham when it comes to national security? Timmons: This is silly for us to talk about Taiwan. The is very simple - she needs to support the military and support the president. She’ll learn the rest as she goes.”
… This pretty accurately sums up the reason Trump endorsed her. She doesn't know anything so her job will be to just support Trump and do what he says. Trump’s perfect senator.
… Canadian PM Mark Carney held a press conference today:
“This fall we will begin intense discussions with the EU, the world’s second-largest economy, to build a much stronger and deeper economic and security partnership.”
"It's not a surprise that the US would take some form of reprisal to our response to their unjustified tariffs, which was on top of other unjustified tariffs. But what message does that send to the workers in Michigan and Ohio and Kentucky and Alabama who rely on Canadian demand?"
… Trump posted this morning: “Canada has been ripping off the USA for years. Their ridiculously high tariffs on our Farmers and farm products has made life impossible for these great American Patriots, and has long created a 60 Billion Dollar Deficit between our two Countries. Not sustainable, and NOT ANYMORE! On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%. Build in the US and there are ZERO TARIFFS. Canada will be treated like a State no longer! On Trade, and in other ways, also, they are among the worst Nations in the World to deal with. They feel entitled, and yet, WE DON’T NEED CANADA, THEY NEED US! They do 95% of their business with the U.S., with us, the exact opposite!”
The Ask the Editor podcast should be out later tonight as once again it was difficult to choose only 5 of your great questions. These were the 5 that I answered on the show:
What is your take on Jeffries secretly meeting with Kushner? Does he realize how furious it makes Democrats? Does he care?
Assuming Democrats win the senate and house, will anyone challenge Schumer and Jeffries for their leader positions?
What impact will the Canada trade war have on the midterms?
Talk about Byron Donalds blaming the measles outbreak on immigrants.
Is the Navy really going to go through with the design changes that Trump demanded for carriers?
If you missed yesterday’s Bulletin, you can find it here.
… Trump held a going away party at the WH today for Press Secretary Karoline Leavitt which was open to the press. He also veered off into several different topics, which included an announcement of his new vaccine recommendations for children:
“She decided she loved her children more than she loved Trump. I'm very upset about this. She has to go home and spend time with her children. That does happen on occasion with some people - when they love their children.”
“You do it in 5 different shots, 5 different shots, small little shots with those beautiful little bodies can handle it, and I think you're going to see a very big
