Remember how, less than a month ago, stocks took a sudden tumble in the wake of Donald Trump’s bungled response to the violence in Charlottesville when a “rumor” began to circulate among traders that Gary Cohn was on the verge of resigning in disgust?
If you don’t recall what that looked like in markets, that’s ok because conveniently, Tuesday was the worst day for U.S. equities since that rumor sent stocks stumbling and so we’ve got a chart handy:
Of course part of the reason for that decline was that if Cohn was on his way out, it would create all kinds of uncertainty with regard to the future of the Fed leadership just as the central bank prepares to unwind the greatest (or “worst”, depending on how you’re inclined to look at things) experiment in the history of monetary policy.
One could hardly blame Cohn for being disgusted with Trump. After all, the President’s August 15 press conference (ostensibly convened to discuss infrastructure) was a bizarre spectacle even by Trump’s standards. And Cohn had front row seats as the commander in chief regaled reporters with tales of Thomas Jefferson’s slaves.
As a reminder, Cohn apparently penned a resignation letter before ultimately deciding to
go down with the ship stay on board.
But the decision to stay didn’t stop Cohn from speaking out against Trump’s apparent cluelessness (some would call it “bigotry”). “This administration can and must do better in consistently and unequivocally condemning these groups and do everything we can to heal the deep divisions that exist in our communities,” Cohn told FT late last month. (Note: Trump spells it “heel“)
Well according to WSJ, Cohn’s disdain for Trump’s overt racism may have cost ol’ Gary the Fed. To wit:
President Donald Trump is unlikely to nominate Gary Cohn, his top economic adviser, as the next Federal Reserve chairman, indicating that he is open to considering additional names for a pick he has said he would like to make by year’s end, according to people familiar with the president’s thinking.
This shift inside the Oval Office was largely due to Mr. Cohn’s reaction to Mr. Trump’s response to the violence in Charlottesville, Va., in which the president at times blamed both white supremacists opposing the removal of a Confederate war statue and counterprotesters.
In other words: “I’m sorry Gary, you seem like a good guy and all, but when it comes to dictating monetary policy we’re looking for someone who’s more closely aligned with our feelings on the whole Master Race thing.”
This was easy to see coming. Remember, Trump appeared to deliberately leave Cohn out of his presidential shoutouts at a speech in Missouri last week.
This comes just hours after Stanley Fischer said he would be resigning effective next month.
And so, more uncertainty.
Now let’s see how markets digest this latest Cohn tape bomb.