On Thursday evening, we documented the extent to which recent market turmoil has rattled Donald Trump who, according to sources who spoke to the Washington Post, has recently called business leaders and financial executives to “sound them out” on the US economy.
That sounds quite a bit like what happened in December, when Steve Mnuchin called the CEOs of America’s largest banks on a Sunday to ask about “liquidity”, an ill-fated effort to shore up market sentiment which backfired in spectacular fashion the following day. Basically, Mnuchin’s press release documenting the calls amounted to yelling “fire” in a crowded theatre.
Around the same time, a Trump official was said to have called at least one prominent financial luminary for advice on how to stanch the bleeding on Wall Street, where US stocks were on their way to logging the worst December since the Great Depression.
Read more: Trump ‘Rattled’ Amid Market Chaos, Is Calling Business Leaders About Economy: Sources
Well, as it turns out, Trump held a conference call with none other than Jamie Dimon on Wednesday this week, when the 2s10s inverted and the Dow crashed 800 points, in the benchmark’s worst day of the year.
(By the time Trump spoke to Dimon, the Dow was in free fall Wednesday)
Also on the call were Bank of America’s Brian Moynihan and Citi’s Michael Corbat.
The three executives were in Washington for a pre-scheduled meeting with Mnuchin, sources told Bloomberg.
Why would they need to be on the phone with Trump if they were in Washington? Why not just meet him at the White House? Well, because the president wasn’t there, of course. Rather, he’s at his resort in Bedminster playing golf.
Presumably, Dimon, Moynihan and Corbat emphasized to Trump that the trade war is causing considerable angst among market participants and it seems likely they also suggested that his criticism of the Fed isn’t helping, although if they did, it hasn’t deterred Trump.
CNBC, citing a source familiar with the calls, says “the president asked the three men to give him a read on the health of the US consumer [and] also discussed the Federal Reserve and the global economic slowdown that has central banks around the world moving to ease monetary conditions”.
On Christmas Eve, during a call with someone CNBC described as “a well-known investor”, a Trump official was told to advise the president to i) cease and desist from criticizing Jerome Powell on Twitter, ii) stop firing people and iii) strike a trade deal with China.
In the nine months since, the president has done none of those things.
On Friday, the latest read on consumer sentiment suggested Trump’s badgering of the Fed, to the extent it was in part responsible for the July rate cut, is backfiring. Americans are getting nervous about the possibility that a recession is in the cards.
CNBC’s source said the executives told Trump on Wednesday’s call that the consumer is fine, but that Americans would be “doing even better if issues such as the China-US trade war were resolved”.
Senior administration officials this week told the network that the president and Peter Navarro are alone at the White House in blaming the Fed for market volatility, but the same sources said Trump isn’t likely to stop criticizing monetary policy and demanding rate cuts.
(Deutsche Bank)
Ultimately, Trump can call all of the bank executives he wants, but the bottom line is that until he decides to actually listen to people who know what they’re talking about, it’s not going to make any difference.
One imagines it was all Dimon could do not to call Trump a “nervous mess“, as the President branded the legendary banker last September, when the market was sitting at record highs.
Evidence of Trump’s twisted mind. He has to call experts to tell him what everyone around him (except his sycophants ) is telling him, what the numbers are saying, and still he does not listen. His total lack of even common sense is putting the world into a tailspin.
Trump will not let anything interfere with the wielding of his power. He wants the “win” of single-handedly bringing China to its knees
Trump is running the country like one of his hotel deals that fall apart…Baja California, Tampa, Panama, everyone gets burned but Trump & his family. He’s clueless, but hey let’s buy Greenland.
Ha ha, funny!!!
We are in the midst of a trump bankruptcy, and anyone with half a brain knows things are getting worse everyday! Unfortunately trump and the GOP are playing with America’s future — and yields are headed lower and the train wreck is accelerating.
In 1998, researchers Arturo Estrella and Frederic S. Mishkin tested various leading indicators to gauge which ones were best at signaling future recessions. They found that the 10Y-90D term spread performed better than any other indicator, including variables such as stock prices and changes in the money supply.
https://fred.stlouisfed.org/graph/?g=oEjz
Trump has three bankruptcies to his (dis)credit. Who’s ever bankrupted a Casino before? They’re a license to brint money. I guess he ‘skimmed off’ too much.
Now, as the ‘big Kahuna’ he’s going to set the modern bankrptcy record…bankrupting the United States of America! Who knew? Maybe Putin knew.
Here’s where the Fed fucked-up last year, switching it up …
Not that trump was right, just that the Fed bought into flawed research!
“Participants also discussed a staff presentation of an indicator of the likelihood of recession based on the spread between the current level of the federal funds rate and the expected federal funds rate several quarters ahead derived from futures market prices. The staff noted that this measure may be less affected by many of the factors that have contributed to the flattening of the yield curve, such as depressed term premiums at longer horizons.
https://www.marketwatch.com/story/heres-the-new-recession-indicator-presented-to-fed-officials-2018-07-05
I’m just Bopeep, but that Fed model adjustment looks like that the Fed raised rates and went against the advice of the model data. Pondering back, inflation was never ever an issue a year ago, so raising rates never made sense. If anything the Fed had no clue what they were doing — and then along comes trump with economic stupidity, adding jet fuel onto a forest fire and now both the Fed and trump looking hopelessly moronic, as a global recession phases in. Maybe this is just a perfect storm for hedge funds and people that make money off of volatility, like maybe the trump dynasty. Santa is not gonna like this!
https://fred.stlouisfed.org/graph/?g=oEk4
Near term rally looking more likely.
And still nothing from the one man who could have stopped the nonsense…right Mitch. Oh right, you’re on summer vacation while the world economy is falling apart. sorry to bother you.
Powell fucked up bigly by raising rates and doing QT at the same time. Mango said that the other day and he was right! Now if we could only fire the idiot who put Powell in charge…
This is fake, it was scheduled call that happened to coincide with a drop in the Djia. Mnuchin has scheduled these calls months in advance. Clickbait, and all you people who commented are fools, stop being misled!! Wake up!!
This isn’t true. The meeting with Mnuchin was scheduled in advance, but the topic of the meeting had nothing to do with the market. Specifically, the meeting with Mnuchin was about banking secrecy and money laundering. That was confirmed by at least two administration sources. The call with Trump was not, in fact, scheduled. He wasn’t even in Washington. He’s in New Jersey. Bloomberg and CNBC have both confirmed this with multiple administration sources. What’s amusing is, all you would have to do to confirm that our account is accurate is Google the story. Every financial news outlet developed their own sources who all said the same thing. And, just 12 hours previous, The Washington Post essentially previewed this when their own sources said Trump had been on the phone with “business executives” this week.