Fit To Be Tied.

As you can probably imagine, Donald Trump was fit to be tied on Monday, as the White House looked on in horror at the chaos on Wall Street, where stocks tripped the circuit breaker at the open, falling by the limit.

For a president who prides himself on purportedly “legendary” business acumen, and who famously views the Dow as a kind of real-time barometer of job performance, days like Monday (and stretches like the final week of February) are the absolute worst-case scenario.

“So much FAKE NEWS!”, an incredulous Trump shrieked, into the digital void on Monday morning, as stocks careened lower. He predictably tried to spin the oil price collapse as a positive development for the US consumer. “Gasoline prices coming down!”, the president exclaimed.

Read more: ‘Cross-Asset Pandemonium’ As Market Crash Triggers Circuit Breaker On Black Monday For Wall Street

It probably occurred to him that efforts to jawbone sentiment would fall on deaf ears. It is entirely likely that the plunge in crude will trigger defaults and bankruptcies for high-cost US producers. When viewed in conjunction with the expected hit from the virus, a US recession is now much more likely, albeit by no means certain.

“The worst for the economy is still to come over the next several months”, Pimco’s Joachim Fels said, in a note calling a US recession a “distinct possibility”.

“The sky is falling”, MUFG Union Bank’s Chris Rupkey declared, on Sunday. “Get out, get out while you can. Wall Street’s woes have to eventually hit Main Street’s economy hard. Bet on it”.

“A US recession is more likely than not”, Larry Summers told Bloomberg TV, in an interview.

High yield credit risk witnessed a six standard deviation widening on Monday. “As of last Thursday before the collapse of the OPEC+ agreement, US HY Energy credit spreads were already above 1000 bps, a level they had last traded at in March 2016 when WTI prices were trading at $35/bbl”, Goldman reminded clients, in a note.

There is, in short, nothing “fake” about this “news”:

The S&P 500 energy index fell 19% on Monday. That is the largest one-day decline going back to 1989. Seven stocks fell by 40% at one juncture.

Trump went on to lament the Saudis’ spat with the Kremlin. “Saudi Arabia and Russia are arguing over the price and flow oil”, he said. “That, and the Fake News, is the reason for the market drop”.

If you’re wondering what the president means by “fake news”, in this case he’s referring to the COVID-19 situation, something he made abundantly clear, when he subsequently tweeted the following:

So last year, 37,000 Americans died from the common Flu. It Averages between 27,000 and 70,000 per year. Nothing is shut down, life and the economy go on. At this moment, there are 546 confirmed cases of CoronaVirus [sic], with 22 deaths. Think about that!

He needn’t have implored anyone to “think about that” – people are thinking about it all day, everyday, which is one reason why markets are in free fall.

Of course, that’s precisely what Trump means. He’s suggesting the same thing that CNBC’s Rick Santelli suggested last week in an irritated rant – namely that measures taken to contain the virus aren’t worth it from an economic perspective. The Lancet discussed this tradeoff from an academic point of view on Friday.

Read more: Governments Can’t Minimize Both Virus Deaths And Economic Damage

Needless to say, health officials and critics of the administration aren’t going to be particularly enamored with Trump’s tweets today – especially at a time when the death toll globally has reached 3,800.

“The threat of a pandemic has become very real”, WHO Director-General Tedros Adhanom Ghebreyesus said. “But it would be the first pandemic in history that could be controlled”.

It can’t be controlled if nobody tries, though. And that strikes at the heart of what’s so contentious about Trump’s implicit criticism of the containment efforts.

Two US Senators (Ted Cruz and Paul Gosar) are under self-quarantine, while Rick Cotton, executive director of the Port Authority of New York and New Jersey, now has the virus.

Meanwhile, Ireland canceled its St. Patrick’s Day parades, Italy ended ski season early, Princeton moved all classes to the virtual realm and the deputy governor of the Riksbank is infected. Here’s a snapshot of the situation globally:

We can all debate the proper course when it comes to balancing economic interests against containment efforts, but, again, there is nothing “fake” about the virus itself. It’s very real, and it’s still spreading, although there are some signs things are slowing down in a few locales.

When it comes to US markets, the White House should probably be prepared for more tumultuous days. That doesn’t mean every session will be like Monday, but you don’t just get this kind of move in isolation. Volatility would have to reset meaningfully and sustainably lower for the vol.-targeting universe to start rebuilding equity exposure and CTAs are likely deleveraging further as we speak.

On the bright side for the president, the US is on the fast track to getting those negative yields he’s been after for the last two years.

In fact, Monday saw the largest intraday drop in 30-year yields in history.

That’s made all the more incredible by the fact that the fifth-biggest intraday decline happened just – checks notes – one session ago.

Goldman on Monday changed its Fed call for at least the third time in the past two months. Hatzius now sees a 50bps cut later this month, and another 50bps in April. That would take rates back to the lower bound.

As a reminder, the medicine cabinet is nearly empty…

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