Remember when Don Jr. and Kellyanne Conway were all over Twitter and cable news shouting about how the stock market was up because a “businessman” was now in charge of the country?
I do. That was always amusing because in this case, the “businessman” in question has bankrupted not one, not two, not three, not four, not five, but six businesses and as it turns out, the fairy tale of Donald Trump “the man who turned a ‘small loan’ from his father into an empire” was just that – a fairy tale.
You didn’t have to be an economist or a famous financier to understand that in reality, Trump would have more money today had he simply plowed his inheritance into an index fund and let it sit for fifty years. Indeed, Elizabeth Warren suggested as much long before the New York Times confirmed it earlier this year in a sweeping expose.
Fast forward 11 months from the euphoric equity market highs of January 2018 and U.S. stocks have collapsed in the worst December rout since the Great Depression. The proximate cause: Donald Trump’s economic policies which have i) forced the Fed to lean more hawkish than they otherwise might, ii) cast considerable doubt on the fate of global trade and commerce, iii) saddled the U.S. with an even more unsustainable debt burden than he inherited when he took office.
A real “businessman” would naturally know how to turn things around, as would a legendary investor of the sort Trump claims to be. But because Donald Trump is neither a businessman nor an investor, he is absolutely clueless as to how to stanch the bleeding.
So what did he do earlier this week following the worst Christmas Eve trading in recorded history? Why, he had someone ask a real investor for help, that’s what he did. Here’s CNBC to ‘splain:
A high-ranking Trump administration official reached out to at least one well-known investor for advice on markets after a recent drubbing for stocks, sources told CNBC.
The call took place after a sell-off on Christmas Eve, the worst day of Dec. 24 trading ever.
That would be funny enough on its own, but it gets better – and immeasurably so.
Can you guess what this “one well-known” investor suggested Trump do? If you said: he/she advised the President to stop being a crazy idiot, you win a call from a “high-ranking Trump official”, apparently. Here’s CNBC again:
The administration, which has judged Trump’s success in part on stock market performance, is “determined” to boost equities, the sources said. The sources said the investor advised the official to tell the president to end his criticism of Powell on Twitter, stop administration turnover and reach a trade deal with China in order to help markets.
In case it is in any way unclear from that (and I don’t know how it could be) whoever this was, basically told Trump that his entire strategy for everything, whether it’s his cabinet, his economic policies, his foreign policies and/or his approach to dealing with the Fed, is stone, cold wrong and, if it persists, may ultimately catalyze an outright market collapse.
What else could we possibly add here other than to note that all of the people who were variously lampooned for predicting, on election night, that eventually Trump would crash the market and transform everything he touches into dogsh*t, have now been vindicated.