Why would Ackman do this? One interlocutor on X pointed out that Pershing Square invested $10 million in X back when it was Twitter, but that’s pocket change to Ackman, and anyway, that money is long gone. I think Ackman defends Musk and stays on X because the site has been Ackman’s tool lately for controlling the bond market. The totality of Ackman’s control in that realm—The Washington Post has called him the “big, bad alpha wolf” of hedge funds—explains why Ackman thinks he ought to run Harvard and pretty much the whole world.
Let’s talk about the bond market. As recently as October it was in terrible shape. Bond traders were dumping so many Treasuries that 10-year bond yields rose to 16-year highs. The prevailing view was that it had something to do with the budget deficit. But two months later, Hanukkah candles are burning, Eartha Kitt is singing “Santa Baby” on the radio—and the bond market has recovered. On Wednesday, 10-year Treasury bond yields dropped 11 basis points down to 4.098 percent, their lowest level since September, on news of a reduced 2.4 percent inflation forecast for 2024 from the Fed, down from the previous 2.6 percent.
Just to be clear, a drop in Treasury bond yields, at least in this context, is good news rather than bad. When nobody wants to buy government bonds, the Treasury department has to jack up yields, which makes the bonds more appealing to buyers but effectively lowers the price and puts Uncle Sam deeper in hock. Once bond purchasing rebounds, the Treasury can lower those yields, thereby raising the bonds’ price and easing Uncle Sam’s indebtedness.