Trump ‘Rattled’ Amid Market Chaos, Is Calling Business Leaders About Economy: Sources

Trump ‘Rattled’ Amid Market Chaos, Is Calling Business Leaders About Economy: Sources

On Thursday afternoon, en route to a Manchester, New Hampshire, rally, Donald Trump cranked up the economic propaganda. "If for some reason [I don’t win] the 2020 election, you’ll see this economy go down the tubes”, he warned. He reiterated the point once he got to New Hampshire. Here's the clip: (If the video does not load, please refresh your page) "You have no choice but to vote for me because your 401(k)s -- down the tubes", Trump insisted. "Everything's gon
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6 thoughts on “Trump ‘Rattled’ Amid Market Chaos, Is Calling Business Leaders About Economy: Sources

  1. If nothing else, Christmas looks like it will embrace lower yields, but, that could change, and rates might even be lower after Brexit, but if trump keeps flapping his fish lips, rates could also go lower, but, if the Fed ignores inflation and doesn’t play politics, rates could go even lower, but, if the dollar continues to strengthen and commodities head south, rates could go even lower, but, if investors begin to think that things are totally insane and a recession becomes a given and people hoard cash, rates could go lower. I have seen this all and more:

    https://www.cmegroup.com/tools-information/quikstrike/treasury-analytics.html

    1. The Fed has plenty of options. Sure they can cut rates lower, of course, but they can also cut rates a lot lower. If they cut rates lower, they could be seen as a hawkish surprise and the markets will force the Fed to cut rates a lot. If the Fed accedes, and the market have already priced in the Fed cutting rates a lot lower, that will be interpreted as a hawkish pivot, and the markets could crash, credit yields would widen, liquidity would evaporate, etc. etc. That can’t happen, so the Fed will have to restart printing mo…- quantitative easing. Their hands would be tied, you see. It is very complicated. That money would have to be parked at banks, so they can use that extra money to buy back their shares to make up for financial stocks being hammered lately. The Fed could also give a little insurance cut, and maybe a surprise cut in between meetings. Not doing so would be hawkish and exorbitantly tight. The Fed can always reverse stagflation by measuring it differently.

  2. Or Trump could cave. Suppose he sends Mnuchin to Beijing to ask for whatever deal they were close to last year, minus whatever China was unwilling to give then, minus whatever China is unwilling to give now, no sanction on Huawei, bless whatever Xi does in Hong Kong, and throw in some Trump family business deals.

    While beating China seems to be one of the few priorities Trump actually has, his top priority is himself and he’d sell out anyone or anything to protect that. Bolton can be muzzled – in fact, have we heard from him lately? – Navarro is disposable, maybe Jared will take over trade negotiations, with instructions to produce a deal at any cost.

    A signed Greatest Deal Ever with China (doesn’t matter how insubstantial, that’s what he’ll call it) plus successfully bullying the Fed into cutting Fed Funds to 1% – would that avert a US recession or at least delay it until 2021? If done soon enough?

    Recession is fast becoming the consensus if not the “most crowded trade”. While the yield curve inversion and plenty of econ data points point to recession, other data points don’t. Maybe the recessionary data points are the leading ones and the non-recessionary data points are the coincident ones. The lag from yield curve inversion to recession is 1-2 years, Trump just needs it to be 1.5.

  3. Haven’t we seen this farce before (w. W.)? Take a Democrat-managed economy that is growing reasonably well (2 percent) and blow it up for the benefit the .01% and your Republican cronies. But, hey, if that’s what it takes to send Trump (and his idiot kids) back to Queens, sign me up.

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