Former FX trader turned Bloomberg contributor Mark Cudmore has been on a roll this week, penning missive after missive decrying the Trump effect and what it means for “Brand USA.” For those who missed it, do yourself a favor and skim these:
- Trader: “Markets Are Sleep-Walking Into Disaster” As Trump Becomes “Autocrat”
- “Brand USA” Has Suffered Irreparable Damage: One Trader Sounds Off
Thursday finds Cudmore a bit more reserved (unfortunately, as I was exceedingly pleased with his rants), noting that markets have now become desensitized by the sheer craziness of Trump’s bombast.
It’s kind of like how an entire generation has been desensitized to violence by progressively more graphic television shows.
It also reminds me – and this is morbidly funny – of how during 2015, ISIS eventually ran out of ideas when it came to producing execution videos. Once they burned someone alive and drowned a handful of prisoners in a cage in sparkling HD, the shock value peaked. From there, the group displayed a marked lack of creativity, resorting to simply placing prisoners in a Toyota Corolla and blowing up the car. A few weeks later, the put some folks in a row boat and blew it out of the water.
The point: the violence nob had already been cranked to the Spinal Tap-ish “11”.
From that point, the terror group would have had to nuke something to get any attention.
The same now goes for Trump. After instituting the Muslim ban and firing the acting Attorney General for refusing to enforce it, the exceedingly ridiculous threat to send troops into Mexico (yes, he actually threatened that – look it up) went virtually unnoticed.
And so, without further ado, here’s Mark Cudmore on a market that’s now desensitized to Trump’s insanity.
Via Bloomberg’s Mark Cudmore
We’re starting to tire of President Trump’s outbursts already. While this might be worrying on a geopolitical level, it’s a positive for markets. Until it’s not.
- Trump comments are becoming a catalyst for jokes rather than market moves. Today it was revealed that Trump told Mexico’s president that he might send troops across the border and the concept barely registered across assets
- It’s concerning on a number of levels that moral outrage is declining so quickly. But from an investment standpoint it does mean that it’ll take something really shocking to sustainably hit risk appetite
- Global economic data continue to be strong and should provide optimism if the administration doesn’t manage to derail trends
- This was meant to be the year of macro but so far fundamental analysis is taking a back seat to Twitter feeds. As a result, it’s actually a stock-pickers market. Those who are bearish don’t buy the VIX but instead purchase protection on individual sectors or equities that may be impacted by the next policy pronouncement
- So far, the administration’s decrees seem distinctly negative for global growth. But markets are trading relatively well all things considered. Tuesday was the fourth straight day of losses in the S&P 500 Index and the session still closed within one percent of the record high
- I remain worried and bearish. Financial markets are overly complacent to the severe risks from Trump’s actions and a nasty correction is possible. However, the more outbursts survived by the market, the less marginal impact each will have