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New York Post
13-06-2025
- Business
- New York Post
How to read the tea leaves on stalled $8B Paramount-Skydance deal
Everyone is reading the tea leaves these days on the seemingly forever stalled $8 billion Skydance-Paramount deal. The Wall Street fortune tellers keep looking for clues as to whether Paramount heiress Shari Redstone will pay President Trump what he wants to settle a $20 billion lawsuit against its CBS subsidiary? And if she does, will that be enough to get the deal approved by his broadcast regulators. Advertisement The Wall Street fortune tellers keep speculating as to whether Shari Redstone will pay Trump what he wants to settle a $20 billion lawsuit against CBS. Jack Forbes / NY Post Design On The Money exists at least in part to cut through the malarkey – and tell you that the latest tea leaves being closely examined are (as a certain great playwright once said) full of sound and fury, signifying nothing. One of those tea leaves led to the suggestion that Paramount laid off people earlier this week, a pretty steep 3% of its current workforce, because it's planning that the deal will not go through. Layoffs of such a magnitude usually occur not when two parties are about to merge, but long before, or when there is no deal in the works. The thinking is that current management is resizing the business because they plan on operating Paramount for the foreseeable future. Advertisement As On The Money was first to report, Paramount's top brass – aside from Redstone (she's recused herself because of the potential payday) – is wary of the optics of paying off Trump so Shari can walk away with what's left of the nest egg left to her by her father, the late merger impresario Sumner Redstone. They fear it could open the company to bribery charges by settling the frivolous lawsuit – alleging '60 Minutes' deceptively edited an interview with Kamala Harris in the heat of the campaign (Trump won the election so there's no damages) – that their directors and officers insurance doesn't cover if some prosecutor brought a case. All true, but the layoffs had little to do with the future of the deal, one way or the other, people close the transaction told On The Money. Advertisement Paramount fears it could open the company to bribery charges by settling the frivolous lawsuit – alleging '60 Minutes' deceptively edited an interview with Kamala Harris in the heat of the campaign. 60 Minutes / CBS SkyDance had planned to own Paramount by now, and was planning the exact same cuts to make the numbers work before it can invest and grow the business, sources said. With the deal in limbo, Paramount just did it first so cross that tea leaf off your list. The second tea leaf is a little more interesting, though I am told, just as inconsequential to the deal's outcome. Advertisement It involves the appearance of Skydance boss David Ellison ringside at a UFC 314 fight in Miami several weeks ago with Trump, who was shaking hands and schmoozing with the likes of Joe Rogan and Shaquille O'Neal. The tea-leaf-reading talk here speculated that the deal is back on – Trump can't wait to approve it as a favor to David's dad, and Trump bestie, Larry Ellison. Why would Trump be seen with Larry's kid if he were about to screw him? Except, guess who else was ringside as Trump made his way through the crowd? Elon Musk, yes that Elon who had just called Trump some really nasty names. So nasty that earlier this week, Elon issued a semi-apology. He was sitting with his son, not far from the younger Ellison and Trump. So cross that one off as well, deal watchers tell me. For now, those looking for clues on how this stalemate ends will have to turn over a new tea leaf.
New York Post
06-06-2025
- Business
- New York Post
How Wall Street's exuberance — despite Trump's tariffs — masks major warning signs
'Either the entire street is wrong, or the good times will continue to roll.' So said a top hedge fund manager, remarking recently to On The Money about the weird disconnect he's seeing lately in how the market is pricing in Trump's trade war. What surprised him is the latest iteration of the market zig-zagging is that after freaking out, investors appear to be pricing in the Trump tariffs as a big bowl of nothing. Advertisement 4 With Commerce Secretary Howard Lutnick out of the picture, investors appear to be pricing in the Trump tariffs as a big bowl of nothing. Jack Forbes / NY Post Design The recent maybe irrational exuberance comes even as Trump keeps throwing fuel on the tariff fire. After pausing them on the world, including the most draconian levies on China, which supplies the US with cheap goods and keeps our inflation rate stable, he just blurted out that he's doubling tariffs on steel and aluminum. The market didn't tank as it did during the early days of the tariff tantrum. In fact, there's green on the screen for a policy that is supposed to slow growth and/or increase inflation, according to most economists. Advertisement So, what gives? First, economists aren't making the market bets you're seeing. Asset managers, hedge funders, traders and a bunch of so-called mom-and-pop investors continue to show an appetite to buy, and digest bad news in the most favorable light. The best I can tell is that they're making a forward-looking bet that Trump, through his trusty and highly competent Treasury Secretary Scott Bessent, will negotiate all of the tariffs — even against super adversaries like China — down to something either meaningless or manageable for the economy to absorb. Advertisement 4 The recent maybe irrational exuberance comes even as President Trump keeps throwing fuel on the tariff fire. AFP via Getty Images Stocks will then trend higher on his deregulation and tax policy found in the 'Big Beautiful Bill,' the thinking goes. Commerce Secretary Howard Lutnick's MAGA-inspired dream that tariffs on foreign goods will create a domestic manufacturing utopia will never materialize, because Lutnick is largely out of the picture. Bessent has taken the reins, and he's crafting trade deals that will lead to stable economic growth, low inflation and high-tech manufacturing jobs the Trump tax and regulatory policy will create, or so the thinking goes. So, what could go wrong? A lot, according to a few smart Wall Streeters I know as they look back at recent market history and figure out when was the last time the markets defied conventional wisdom and got things so wrong before an economic storm hit. Advertisement 4 Stocks will then trend higher on his deregulation and tax policy found in the 'Big Beautiful Bill,' the thinking goes. REUTERS One big misread came in the run-up to the 2008 financial crisis. Every major CEO and most large investors (not all but most) viewed the 2007 'credit crunch,' where banks cut back lending as housing prices tanked, as simply a downturn in the economic cycle. A few Fed rate cuts, and presto, things would be back to normal. Recall how the Dow hit then historic highs in October 2007 (around 14K), just before the bottom fell out early the following year. It began with bond insurers imploding, then subprime lenders, then Bear Stearns and Lehman Brothers. By the end of September 2008, the meltdown hit nearly ever bank and Wall Street firm because the housing downturn was more than a downturn, it impaired the balance sheets of major financial institutions so much that most (except Jamie Dimon's 'fortress balance sheet' at JPMorgan) were on the verge of insolvency 4 Traders are betting Trump will negotiate tariffs down to something either meaningless or manageable for the economy to absorb. JOHN G MABANGLO/EPA-EFE/Shutterstock After the financial collapse, and the government bailouts, came the Great Recession, which forever altered the political landscape. It ushered in a wave of left-wing (Barack Obama) and later right-wing populism (Donald Trump). There are plenty of structural differences between 2008 and today. Our banks are pretty sound, but we have more debt, a lot more. We are more dependent on foreign buyers of the debt, without whom interest rates would be much higher as debt payments continue to grow. Advertisement The trade war has pissed off some of our foreign bond buyers, namely Japan and China. Plus markets hate being surprised. If we're experiencing a bit of irrational exuberance before the reality of higher baseline tariffs kick in no matter what deals are cut, if the economy does begin to falter and inflation does pickup, if foreign buyers don't keep buying our debt and interest rates spike, the correction could be pretty brutal if history is any guide, traders tell On The Money. Until that happens, it's all blue skies ahead.
New York Post
06-06-2025
- Business
- New York Post
Why TikTok will likely get another lifeline as sell-or-ban deadline looms
Bipartisan critics of keeping TikTok operating in the US simply have too much other stuff on their plate to muster a fight should President Trump once again extend the deadline for the Chinese-owned app to divest in the US, On The Money has learned. That's the word from sources close to the White House and key figures in Congress who have debated whether TikTok should go dark in a couple weeks over concerns it's essentially spyware for the Chinese Communist Party in its quest for global domination. As On The Money reported on Tuesday, here are the scenarios of TikTok's short-term fate: A Wall Street banker involved in the deal to sell the app to US investors said Trump could be persuaded to let TikTok 'go dark' and disappear from app stores on June 19 if he believes it will give him a strategic advantage in the complex and at times acrimonious trade deal negotiations with the Chinese. Trump really loves the app (he thinks it helped get him elected in 2024 no matter how much it's spying on us). Jack Forbes/NY Post Design But more likely is that he throws TikTok yet another lifeline, sources say. Trump really loves the app (he thinks it helped get him elected in 2024 no matter how much it's spying on us). He is poised to extend the TikTok ban deadline – for the third time – as the White House and China prepare to hold trade talks, which are in their nascent stages with Trump speaking directly with China President Xi Jinping by phone on Thursday. Plus, there might not be that much pushback as there was in the past. Another extension could happen without much of a fuss because Congress – including its bipartisan TikTok haters – is probably too distracted with the Big Beautiful Bill, pruning excesses amid criticism from none-other-than Elon Musk, extending the Trump 1 tax cuts and the China-US trade talks to really lose that much sleep if Trump does extend, they say. 'There's an 80% probability it gets a 75-day extension and stays lit up,' said one Wall Street executive who is part of the on-going Trump-led negotiation to save TikTok from disappearing through a deal that will transform its ownership to majority US hands. 'Apparently, it dropped to the list of issues on the China negotiations, and the tax bill has sucked the oxygen out of the room.' The White House had no comment. Trump and Chinese President Xi Jinping in 2019. REUTERS TikTok, through its Beijing-based parent company ByteDance, has long denied it is a surveillance tool for the CCP, but doubts abound. Trump, of course, wasn't always a TikTok lover. He sought its ban back during his first term. The app went dark for a few hours after the divest-or-ban law, signed by former President Joe Biden, went into effect Jan. 19. But it got a reprieve when Trump signed the first extension with an executive order after returning to the White House. He then gave TikTok another lifeline in April as a deal to put TikTok into the hands of a majority-owned US company was nearing the finish line, as On The Money previously reported. However, that was throttled by Trump's 'Liberation Day' tariff war that was particularly tough on China, one of our biggest trading partners, but a global adversary that doesn't open its markets to US companies looking to sell stuff on the Mainland and tap into its growing consumer market. The consortium of private sector players, if the deal is completed, will be led by tech giant Oracle, founded by Trump friend and supporter Larry Ellison.
New York Post
06-06-2025
- Business
- New York Post
Stalled ‘beautiful' bill drains nation's rainy-day fund — and things could soon turn ugly for US households
Congress' dithering over President Trump's 'Big Beautiful Bill' has the potential to make life difficult in the coming months – by possibly spiking interest rates, On The Money has learned. Most Americans don't appreciate all the ways our elected officials have saddled them with trillions upon trillions of dollars in debt. The national debt stands at around $36 trillion, and needs to go higher to pay for all the stuff the House didn't cut in passing the buck to the Senate. Until Congress crafts a budget and amends that annoying law known as the debt ceiling, Treasury Secretary Scott Bessent has been tapping something known as the Treasury General Account. Jack Forbes / NY Post Design Until Congress crafts a budget and amends that annoying law known as the debt ceiling, Treasury Secretary Scott Bessent has been tapping something known as the Treasury General Account. The account, known on Wall Street bond trading desks as the 'TGA,' is needed to pay short-term bills and acts like a rainy-day fund. It's like your checking account, except hundreds of billions of dollars larger. However, it's massively underfunded and in need of cash (aka more borrowing) so the government can keep the lights on – which could mean a nasty spike in interest rates sometime this summer when the selling begins since higher yields will be needed to attract more buyers, according to the smart Wall Street folks at the Bear Traps Report. Bessent has been toying with ways to get banks to hold more treasuries as part of the capital cushion. Foreign buyers are needed but Trump's trade war makes it difficult to get saving nations like China and Japan to once again come to our rescue. 'The longer it takes for Congress to pass the bill and raise the ceiling, the more Bessent depletes the government's checking account, and therefore the more money he has to raise once the ceiling is lifted,' Bear Traps analyst Robbert Van Batenburg tells me. Bessent, right, has been toying with ways to get banks to hold more treasuries as part of the capital cushion. AP 'Yellen in the 2023 debt ceiling crisis drove this checking account down to less than $50 billion, forcing her to raise a whopping $800 billion in the summer of 2023.' To be sure, the dangerous TGA drawdown comes from overspending, but also from how spending works via the debt ceiling law. The ceiling is supposed to apply the brakes on borrowing so future generations don't have to pay for government largesse we consume today. Given our addiction to big government and debt to finance it, the ceiling is a misnomer — it's constantly flouted and amended higher, though the politics of raising it often gets messy. Charlie Gasparino has his finger on the pulse of where business, politics and finance meet Sign up to receive On The Money by Charlie Gasparino in your inbox every Thursday. Thanks for signing up! Enter your email address Please provide a valid email address. By clicking above you agree to the Terms of Use and Privacy Policy. Never miss a story. Check out more newsletters When the debt ceiling is finally raised in the coming weeks, the government might have to issue another $400 billion in additional debt just to get back to where it was at this time last year, Van Batenburg said. Yes, that's an extra $400 billion on top of the nearly $800 billion deficit this quarter that Bessent will cover once the budget deal is passed, the debt ceiling is lifted and the government goes back to mortgaging your kids' future. The full yearly deficit is likely to hit $2 trillion or more. You might be asking why we need TGA in the first place. The answer is that if we don't fully fund the TGA, it would send a terrible message to the markets that we can't pay for stuff. It could be interpreted as a default of sorts, which would send interest rates even higher. Sounds like a no-win situation for the American taxpayer.
Hindustan Times
04-06-2025
- Business
- Hindustan Times
Will TikTok be banned on June 19? Trump signals another deadline extension
President Donald Trump is expected to delay enforcement of the TikTok ban for a third time, as new trade talks with China ramp up, per the New York Post's On The Money. The existing extension, which mandates that TikTok's Chinese parent company, ByteDance, divest from the US version of the video-sharing app, expires on 19 June. 'The president has said he's willing to (announce another extension) if it has to happen,' a government official familiar with Trump's thinking told On The Money on Tuesday. The same official added that Beijing is using TikTok as a 'bargaining chip,' noting, 'The Chinese just want to hold this up as leverage in the trade talks.' ALSO READ| Donald Trump's granddaughter shares TikTok dance video ahead of 18th birthday, internet reacts 'It'll be protected. It'll be very strongly protected. But if it needs an extension, I would be willing to give it an extension,' the POTUS told NBC News while agreeing that he has a 'little sweet spot' for TikTok in his heart. Notably, Trump ally Larry Ellison's Oracle expressed an interest in acquiring the Chinese social giant's US part. Talks were moving forward until Trump reignited his so-called 'Liberation Day' trade war earlier this year with steep tariffs on Chinese goods, some as high as 145%. Those have since been reduced to 30% as both sides have shown renewed interest in hashing out a final agreement. However, Trump now seems to view the app differently. 'He believes the app, popular with younger Americans, helped get him elected in 2024,' a Wall Street banker involved in the TikTok deal told On The Money. The same banker warned that Trump might even let TikTok 'go dark' on 19 June, disappearing from US app stores, if he believes it would give him an upper hand at the negotiating table. ALSO READ| Elon Musk rips Trump's 'big, beautiful bill' in scathing post, 'Shame on those who voted for it' TikTok has long denied allegations of data sharing with the Chinese government. The Biden administration had signed the original 'divest-or-ban' law before leaving office, setting it to take effect on 19 January, just one day before Trump's inauguration.
