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‘Prudent’: As Panic Spreads, Treasury Rushes To Explain Why Mnuchin Yelled ‘Fire’ In A Crowded Theatre
U.S. equity markets were bleeding badly just an hour into the cash session following another mini-"flash" event in futures that rippled across markets, catalyzing risk-off moves in Treasurys and USDJPY.
As of 10:00, all sectors were red. Hilariously, financials were down 1.5%, stone cold proof that Steve Mnuchin's call to bank CEOs about liquidity had exactly the opposite of the intended effect.
(Bloomberg)
Speaking of that call, Treasury appears to be coming around to the fact that Mnuchin
Look, here’s what happened:
1) Trump calls mnuchin and says, you’ve got to do something to stabilize these markets. Apparently I can’t do it, and Jay won’t.
2) mnuchin calls from people he trusts and ask them why markets are so volatile. the people he’s talking to read the same analysts that you do. They tell him that markets are volatile because of a lack of liquidity.
3) Steve, completely mistaking what kind of liquidity is being discussed, thinks to himself that that’s something he can do something about.
4) he tweets about the six biggest banks being totally liquid to reassure the markets.
And scene.
That sounds about right!
Tragedy of errors..
How stupid are these guys? Next meet Erdogan at the Whitehouse and discuss central bank authority on camera, plus a little theology.
Sadly, I wouldn’t be surprised if Trump wanted to follow Erdogan’s lead and replace Powell with Jared Kushner.
He just tweeted out this gem this morning:
“The only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch – he can’t putt!”
“…theology.” Now that’s some downright funny stuff!!
Fed created that big, fat, ugly bubble espoused by Trump on Sept 29th 2016. Markets should return to that level fairly soon, then the bubble can pop.