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Today’s Agenda

Gone in a Flash

Sleepaway camp is one of the most precious, time-honored traditions in America. For decades, children have parted ways with their parents each summer for a few weeks to experience unbridled freedom. Strangers become lifelong friends. Campfire songs get belted out in wood cabins after curfew. Fingers become glued together by burnt marshmallows. TikTok, Snapchat and YouTube are replaced with water balloon fights, popsicle stick towers and fits of laughter.

The thought of all that — the little campers and their stuffed animals and friendship bracelets — getting swept away by a 26-foot-high swell is sickening. Even more sickening is the fact that the young girls and staff members from Camp Mystic who perished represent a quarter of the Guadalupe River flood victims, and many more are still missing.

Photographer: Brandon Bell/Getty Images North America

Mike Bloomberg is heartbroken by the disaster in Texas. And he’s also angry: “So many lives could have been saved if elected officials had done their jobs,” he writes (free read). “They owe the families who lost loved ones — the death toll from the Fourth of July floods is now at more than 100 — more than thoughts and prayers. They owe them a sincere commitment to righting their deadly wrong, by tackling the problem they’ve turned their backs on for too long: climate change.”

President Donald Trump — who called the flood “a 100-year catastrophe” — plans on visiting the water-logged state on Friday. Yet he doesn’t need to hop on a plane to Flash Flood Alley to start addressing the problem. Plenty of things could be done right from the comfort of his Oval Office.

“Climate change is a manageable problem with practical solutions,” writes Mike. For starters, Trump could return the words “climate change” to government websites. He could give the Federal Emergency Management Agency the funds it needs to build resilient infrastructure. He could instruct the Environmental Protection Agency to focus on greenhouse-gas emissions. He could reinstate the emergency preparedness grants he canceled. He could keep extreme weather forecasters employed. He could restore the essential positions that he cut at the National Weather Service. In taking climate change seriously, officials “will not only save lives, but they will also improve our health, reduce our energy bills and create more jobs,” Mike says.

In addition to federal intervention, Mark Gongloff says all of us — even those who have never witnessed the horrors of a flood or a wildfire or a hurricane — need to familiarize ourselves with climate hazards.

“We can’t rely on government officials to give us adequate warning of the dangers and an action plan when those dangers arrive. We’ll need to do our own weather monitoring and have tested plans to escape with our loved ones to safer ground,” he writes. “We can’t become numb to this and succumb to ‘warning fatigue,’ a real threat as the pace of disasters increases. That risk will rise if our weather forecasts lose accuracy under Trump’s assault on weather and climate science.”

Camp Mystic may be forever synonymous with climate tragedy, but the tradition of summer camp can live on — if everyone steps up to meet the challenge.

The Next Face of the Fed?

As of Tuesday morning, there were 7,401 photos of Jerome Powell on Getty Images. In a lot of those photos, he’s wearing his signature purple tie and holding his glasses like this:

Photographer: Bloomberg

Love him or hate him, Jay Powell — or JPow, if you prefer — has a look. And considerable amounts of lore to boot: He’s a Deadhead. He has a parody account — “Not Jerome Powell” — named after him on X. And he was even involved with the whole Chevy Chase Dog Park scandal back in 2019.

But his time at the Fed is nearing its end. Who will be the next person to make the money printer go brr? Treasury Secretary Scott Bessent is the latest name floating around. John Authers has suspected it’ll be Kevin Warsh, a former Fed governor and investment banker. But Jonathan Levin hopes it’s Christopher Waller — “Chris,” according to Wikipedia — the current Fed governor:

Photographer: Bloomberg

What would Waller bring to the table, other than a different-colored tie? Jonathan describes him as “neither a hawk nor a dove, but someone who has followed the data and presciently sniffed out inflection points in economy.” He also isn’t too shabby at “scenario analysis” which is something Jonathan says market participants should welcome. The fact that the president appointed him during his first term helps as well: “In Waller, Trump and markets get a highly credible policymaker, who has expressed a willingness to lower rates, and the bond market will price his nomination accordingly.” Out with the purple, in with the gray!

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The Word on Jane Street

All week I’ve been hearing about Jane Street this, Jane Street that. But I still haven’t figured out: Where do I find this street? Who is this mysterious Jane? And why is everyone talking about her?

Apparently, Jane is not a person. Nor is she a street. She is an algorithmic trading firm with offices alllll over the world, yet none of them appear to be located on streets named Jane. Weird!

Even weirder, this saga involves the world’s largest options market — stick with me here — which just so happens to be India. During the pandemic, Robinhood and GameStop gamified finance. In India, where digital assets are taxed to high heaven and capital controls force most household wealth to stay at home, options became “a full-blown mania,” Andy Mukherjee says. Now, four out of five equity options contracts traded every day are coming out of the country.

“It’s weird to have an options market that is much bigger than the underlying stock market. The explanation here seems to be largely that Indian retail investors enjoy a gamble, and the best way to gamble on stocks is with options,” Matt Levine writes.

Where does Jane Street come into India’s retail options boom? This little doodle making the rounds on LinkedIn captures it well enough:

Source: Ganesh Nayak via LinkedIn

A lot of people, including the officials at the Securities and Exchange Board of India — SEBI — see that diagram of events and say Jane Street manipulated the options market (hence why SEBI imposed a temporary trading ban on the firm).

But Matt has a different theory: “This does not look like manipulation; it looks like arbitrage. This is: Jane Street came in one Friday morning and noticed that Indian retail traders were buying options on the Nifty Bank index at much higher prices than where the index was actually trading. So Jane Street got to work doing what it does: It sold options to retail traders who wanted them, and bought the underlying stocks to hedge, until the arbitrage closed,” he writes. Read the whole thing.

Telltale Tariff Charts

On Tuesday morning, Trump told the world in all caps that “TARIFFS WILL START BEING PAID ON AUGUST 1,” no ifs, ands or buts. The message arrived on the heels of his “letters,” which appear to just be .pngs posted to Truth Social. Although Trump’s missive to Japan did not contain typos — that honor went to Željka Cvijanović, the chairwoman of the presidency of Bosnia and Herzegovina, who is most certainly not “Mr. President” — Gearoid Reidy says Prime Minister Shigeru Ishiba is outraged all the same. “Japan was among the first countries to begin talks,” he writes, and somehow they’re ending up “with a tariff rate 1 percentage point higher than first proposed three months ago.”

Still, John Authers says “it’s hard to call this an escalation. Nor is it the full-fledged retreat that some had predicted. That’s partly because events in the last three months have strengthened the chances that tariffs stay in force.” Just look at how much money the US has raked in since Trump’s Liberation Day:

What will long-term tariffs mean for stocks? “In the last 20 years, investors got away with some home bias because US stocks outperformed, and markets were relatively correlated because they were so integrated,” writes Allison Schrager. “That will no longer be true if countries trade less and cross-border capital flows decrease. Since diversification won’t be built in anymore, investors will need to seek it out.”

ICYMI

You get to keep your shoes on at the airport.

Jack Dorsey is cooking up a chat app.

Amazon’s Prime Day sales slump.

Kickers

Ben Shelton got Morgan Stanley to give his sister more PTO.

Love Island USA is the summer’s hottest show.

Chefs are sneaking vegetables into your sweet treats.

Notes: Please send mushroom ice cream and feedback to Jessica Karl at jkarl9@bloomberg.net.

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