Ok, well here comes to pushback:
- FUNDING TRUMP BORDER WALL `NONSTARTER’ FOR DEMS, LOWEY SAYS
- SCHUMER WARNS TRUMP AGAINST SHUTDOWN THREAT OVER BORDER WALL
And you can expect there to be plenty more where that came from.
Once again, it’s important for market participants to fully appreciate that this is a President who simply does not understand the extent to which ad hoc, off-the-cuff rants have real-world implications.
To be sure, Trump was playing to his audience in Phoenix on Tuesday night and as we learned from the leaked transcripts of his January call with Enrique Pena Nieto, he does seem to have some vague conception of how far-fetched his border wall idea is.
But Trump’s judgment is severely lacking and he gets hopelessly lost in the moment at rallies when he’s high on his own shrieking. And so we get the kind of rhetoric we heard on Tuesday and all that comes with it.
We’ve talked a ton about the debt ceiling and a government shutdown over the past couple of weeks. Last night, for instance, we outlined the veritable nightmare scenario courtesy of Deutsche Bank.
Well, on the heels of the Phoenix debacle, Compass Point strategists Isaac Boltansky and Lukas Davaz are out with a new note. Highlights are below via Bloomberg…
- The prospect of a government shutdown still poses a potentially serious downside risk for investors, even as our firm belief that the debt ceiling will be lifted removes a profound political risk from the landscape
- Trump’s commitment to securing funds for a border wall dramatically raises the spectre of a shutdown in October and his injurious relationship with Congressional Republican leadership further complicates the underlying calculus
- Four factors increase the potential for an equity market sell-off as govt shutdown risks intensify:
- Further delays confirmations, which would affect Trump’s deregulatory agenda;
- delivers a “psychological blow” to markets,
- serving as a “concrete symbol” of Washington’s inability to govern;
- delays legislative progress on tax reform; and could alters Fed’s policy normalization trajectory
- Compass Point says lawmakers will raise the debt ceiling in mid-September, yet there will likely be a govt shutdown in October
I’m not concerned about a government shutdown due to Trump. He has not only marginalized himself further with Republican voters but, more importantly, he is deep into the process of marginalizing himself with the Republican senate. Certainly enough now that it is possible that a dozen of them would now be emboldened enough to override any budget veto by Trump.
Used to this sh*t from 40+ years ago.
“Don’t worry, we’ll just go in and do OUR thing.”
We are the righteous and NO ONE will stop us.
Batsh*t crazy, same tone today.
I just hope the GROWNUPS get a set and save us from circling the drain in the swamp.
“KNEE deep in the big muddy and they just said to march on.”
Courtesy of Pete Seeger. RIP
Although I agree that the president of the United States has a childlike awareness of the consequences of his actions, I would humbly submit that many financial analysts also seem to have a very immature understanding of politics if they really think that a threat Trump makes at a rally carries enough credibility behind it, even at this admittedly early stage in his presidency, to provoke more than lip service outside the White House. Whether the government shuts down will be up to Congress, not him.
The real economic threat of a Trump presidency is the mental instability and utter lack of expertise, leadership, and frankly knowledge of the person at the centre of it, not the proactive policy positions he may proclaim at this time or that time. It’s obvious that he is unable to grasp the finer points even of a prepared and planned issue like tax and healthcare reforms, let alone the subtleties of a rapidly evolving crisis with high levels of uncertainty. To a large extent the U.S. is essentially leaderless.
I can only assume most professional analysts are well aware of this but simply think they and their clients will be savvy enough to be the first ones out before the highly probable happens at some point in the next three years.