I don’t do emojis, nor memes and I’m almost illiterate when it comes to text abbreviations. For years, I thought “TL;DR” was shorthand for some kind of profanity, until I saw it in a quasi-professional e-mail dispatch, prompting me to seek out the definition.
I do know what “LOL” means though, and I laughed out loud when, on Saturday morning, while perusing a highlight reel of Donald Trump soundbites from this week, I ran across a short clip of 47 extolling the virtues of patience and delayed gratification, both of which, it should be noted, are anathema to his personal constitution.
“Countries who have been ripping us aren’t particularly happy with what I’m doing, but the United States will be very happy, and you know, our farmers are going to be very happy,” Trump explained, reviving on of 45’s favorite trade war perjuries: Farmers are celebrating in their fields.
Funny as that was, the real punchline came shortly thereafter, when Trump, asked whether his abrupt decision to postpone tariffs on Canada and Mexico for the second time in two months might’ve had something to do with falling stock prices, said, “Nothing to do with the market, I’m not even looking at the market.” As unbecoming as this feels for me: LOL.
Needless to say, Trump’s lying when he says he’s not looking at stock prices, but that was surely the least pernicious lie he told all week, and on the off chance he’s telling the truth, it’s a good thing. That he’s “not even looking at the market,” I mean. Because it’s down. In fact, this was the worst week for Wall Street since 2022.
The 4.5% pullback was the fifth loss in six weeks. The S&P now sits just 1% above where it stood on November 4, before America decided to give Trump another shot at restoring lost “greatness.”
Setting aside the frustratingly obvious fact that if stocks were higher instead, Trump, Howard Lutnick and Scott Bessent would be carrying on ceaselessly about the extent to which buoyant equity prices are a reflection of faith in Trump’s agenda (and indeed, they said just that following the election), I find the notion that Trump’s treasure map to America’s new “golden age” goes deliberately through a bear market on Wall Street and a US recession, to be wholly laughable.
I tried, all week, to give that narrative, which Bessent’s now pushing pretty explicitly, the benefit of the doubt. But ultimately, I couldn’t, and can’t.
First of all, I think that story — which essentially says that once Trump’s done cutting federal payrolls and canceling government contracts, America will emerge sober, lean, re-privatized and ready to “rock and roll,” aided and abetted by lower rates, a weaker dollar, deregulation and tax cuts for the wealthy, all as tariffs deliver to farmers a windfall and bring on a Rust Belt revival — misses or ignores Trump’s broader agenda, as discussed at some length in the latest Weekly.
Beyond that, Trump’s pathologically allergic to a falling stock market. To him, that represents failure. He’s said as much on too many occasions to count. (If you claim higher stocks are evidence of presidential success, which he did every chance he got during his first term, then what are lower stocks evidence of?) Trump deifies money, and considers wealth synonymous with virtue. And stocks create a lot of wealth when they’re going up:
As the figure above reminds you, in the four quarters through Q3 2024 (the most recent quarter for which the relevant Fed data’s available), American households saw the value of their stock holdings increase by nearly $13 trillion. Since the pandemic lows, the accumulated gain’s nearly $30 trillion.
That, alongside the post-pandemic housing bonanza, goes a very long way towards explaining why consumer spending held up so well, for so long. If Trump really does intend to — and again, don’t laugh, because this is the narrative the administration’s starting to push and it has a lot of buy-in on Wall Street — intentionally tank the stock market, or at least let it fall if that’s how it’s feeling, then he’s going to risk slamming the brakes on what’s left of the consumer spending impulse.
Who’s spending right now? That is: Who’s still spending? Well, the rich, obviously. Sure, their marginal propensity to consume’s lower (i.e., they don’t “have” to spend every incremental dollar, because they have more dollars than they need), but unlike lower-income households, they can still spend outside of necessities if they’re so inclined, and the strength of that inclination’s proportional to the scope of asset price appreication. If those asset values start to fall, the rich may pull back on spending and the economy will falter as a result.
If there’s anything sillier than the idea that Trump wants lower stock prices as part of some grand strategy, it’s the idea that he wants a recession. Here’s a man who once told the Davos elite that he singlehandedly created “an economic boom the likes of which the world has never seen before” during his first term. That was a lie “the likes of which the world has never seen before,” and the sheer brazenness of it was a testament to the notion that Trump would sooner go out in public with whatever that bedhead looks like, than he would intentionally create a recession during his very first few months back in office.
Again, Trump’s whatever the opposite of patient is, and even though a lot of people worship and pray to him, a saint he isn’t. And yet, the plan Wall Street’s now attributing to Trump requires the patience of a saint. He’d have to ignore months and months of sarcastic press coverage, and Musk would have to spend all day on “X” suppressing #Trumpcrash, #Trumprecession and a constellation of other hashtags lampooning a man who’s famously thin-skinned.
Even if you set all of that aside, there’s no guarantee that an engineered stock crash and recession would somehow end up accruing to Main Street’s benefit through — I don’t know — lower rates, I guess? Just because the rich benefit disproportionately from rising stock prices doesn’t thereby mean a stock crash will benefit the not-rich. Why am I even having to say this?
As with so many other Trump narratives, this story’s amenable to the “What are we even talking about here?” treatment. We’re going to crash the stock market and the economy to save Main Street? We’re going to save Americans from inflation by slapping 25% tariffs on Canada? We’re going to “rebalance” the economy in favor of everyday people by firing the entire federal government, canceling government contracts and cutting off social programs?
Folks, what happens to Main Street in a recession? That’s a rhetorical question. The same thing that happens to Main Street when anything bad happens: It suffers disproportionately.
There is no plan. We have a mad king.
I agree with all your points; your Weekly is such a succinct summary of the narratives’ incoherence the financial press should print it, it’s much better than Gillian Tett’s ruminations. IMHO the risk is that Bessent (he’s a clone of his mentor), like most of his white shoe peers, is arrogant enough to believe he/they can easily resurrect what they’ve destroyed. I understand he considers himself a student of the Japanese market; he clearly missed the part where the policymakers “pushed on a string”. Basic behavioral prediction: confidence and trust, once destroyed, hard to rebuild.
I come here for the insights and analysis and stay for the snark.
Oops, I wasn’t trying to respond to your comment. I was simply trying to leave a comment of my own.
They didn’t put Elon Musk in charge of government efficiency because they think he’s a genius. They put him there because he’s willing to do what actual politicians can’t get away with. Gut the state, break labor protections and sell the pieces to the highest bidder.
This isn’t about making government work better, it’s about making sure it doesn’t work at all. If you starve something long enough, it dies. That is the real plan.
Strip away public services, dismantle worker protections, and when everything collapses, what is left? A state that exists only to enforce property rights and suppress descent.
Musk is not a rogue billionaire acting outside the system, he is the system. He’s proof the corporate aristocracy doesn’t just own the economy anymore, they now own governance itself.
Think about it. Why would Trump, a man who supposedly hates the “deep state” put a billionaire CEO in charge of running the government? Because this isn’t about efficiency, it’s about handing over public power to private hands.
This the Trump playbook for dismantling what’s left of public governance:
Step 1: Dismantle public services. They fire government workers, defund critical agencies and let the infrastructure rot. Then they say “government is inefficient. Let the private sector handle it.” But the private sector isn’t interested in making things better, they are interested in turning a profit.
Step 2: Suppress labor and worker protections. Musk has spent his entire career crushing unions and exploiting workers. Now he gets to do that on a national scale. Do you really think a man who fought tooth and nail to stop Tesla workers from organizing is going to protect your job?
Step 3: Consolidate power and control. Once the government is stripped down to nothing, what remains? Corporate feudalism, a system where you don’t get healthcare, housing, or even internet access unless you pay Elon Musk, Jeff Bezos, or some other Billionaire directly. And don’t think you can protest, because Musk’s “AI driven efficiency measures” and “policing” will shut that down.
This is bigger than Trump. This is bigger than Musk. This is the new model of control. No more traditional politicians, just billionaires openly ruling over you like corporate monarchs.
No more government services, just everything sold back to you – at a price. No more worker protections, just automation, surveillance, and AI deciding who gets to live comfortably and who gets discarded.
And the worst part? They are selling it as progress.
Musk is not here to fix anything, he’s here to burn it all down so billionaires can rule without any oversight.
If we allow this to continue, there won’t be a government left, just a corporate empire where every law, every right, every basic service is controlled by unelected tech lords who answer to no one, and once that happens, there won’t be any elections left to vote your way out of it.
What can you do? You can either build something to replace this system, or they will replace it with something far worse.
Please stop thinking of power as something you ask for. It is not. It is that something you build. Stop waiting for politicians to save you. Start organizing your workplaces, your neighborhoods, and your own systems of survival.
Because if we don’t create an alternative, if we don’t take power into our own hands, then we are just waiting to be ruled.
Every society and government at some point gets to the existential question of survival. It’s hard to see the big picture when you’re in the moment, but this sure feels like our time to act if we believe enough in American democracy to want to keep it.
Dana
Well said. Sadly, most of it will fall on deaf ears. Our nation isn’t divided down the middle, as many think. Rather,it falls into three pieces, like most of Europe. A third of us fall on the right, a clear minority. A slightly smaller number, still close to a third, are “left leaning” and becoming trivialized and also form a clear minority. The final third just don’t care about politics, or our country. They, too, form a clear minority and though they could save us if they cared to, they don’t care and won’t contribute, even now. What a country.
TL;DR; Whatever he says is the plan his cult members will believe that’s the plan.
PS you can get a “copy” of the Goyard bag on TaoBao for about $50.???
Goyard’s funny. Once you’re in their little club, it’s a completely normal luxury shopping experience, and if you go to their physical stores (of which there are precious few), it’s just like any other store. But if you’re trying to buy for the first time, and you don’t go to one of their stores, you have get in touch with the “distance sales” team. You can’t buy online. The wait to get a callback from “distance sales” is weeks, and that’s if they call you back at all. It took me three tries submitting the form online. When you do finally get a callback, you have to give your guy or gal a list of products you want, and then they email you with availability and prices. You then have to e-mail them back and tell them which pieces you want, then they call you and the sale’s completed over the phone. On your first order, they won’t send it to your house. They’ll only send it to the nearest FedEx location to your house, and you then have to show up at FedEx, with a government ID, to get the package. Only after all of that are you a “client” who can buy regularly and have the packages sent to your home.
The other funny thing about Goyard is the way they do the pricing. So, once you get up into the medium-sized bags, the pricing’s pretty much comparable to Louis or Dior or any other top-tier luxury brand. But if you’re trying to get into the Goyard club with a small item — like, say, a wallet — they tax the hell out of you. You can get a great Louis pocket organizer for, say, $500, taxes and overnight shipping included. Goyard will charge you $800 for that same pocket organizer, and overnight shipping will run you another $150 give or take.
It’s a great strategy, because it keeps the club small, but the only problem is that no one cares when you’re out, because unless you’re in a global fashion hub, nobody knows what Goyard even is. So here you are, with your $1,000 wallet, and it may as well be from Belk for all anyone around you at the bar knows, whereas you could’ve turned some heads with your in-season Louis piece for half the price.
All of that said, I’m not gonna lie: It’s a cool little club, and in the impossibly far-fetched scenario where you run across someone who’s also in the club, they’ll be impressed.
Managing a large corporation (150k+ employees) is difficult. It’s even difficult (failure a very real outcome) with smart experienced leadership. Now imagine managing something at least 100 times larger lead by a group of idiots with little expertise and very inflated egos. What’s the emoji for royal f_up. Let’s hope the economy is so complex they can’t completely mess it up. In a month and a half they’ve already sowed so many rotten seeds that we’ll be managing the fallout long after they are gone.
“Nothing to do with the market, I’m not even looking at the market.” As unbecoming as this feels for me: LOL”
In all humility and deference to our dear leader, I humbly beg to differ. I’m afraid that you are partly accepting the Wall Street narrative that “Trump will not do anything that would tank the stock market because that is what he was focused on in his first term!” Translation = once elected, his #1 goal will be to will be to to drive up share prices. Thus, the famed “Trump put.”
I wonder if it is not a really low probablity that the president has a much loftier goal this time which is to be a truly tramsformational president: the president who restored America’s greatness. A president who rightfully deserves to be added to Mt Rushmore.
The president appears to have been won over with the dreams of greater glory. It reminds me of when some radio pranksters called Wisconsin Governor Scot tWalker disguised as David Koch and planted the seed in his mind that they had much bigger plans for him = the presidency. As the great Obi wan once said, “The Force can have a strong influence on the weak-minded.”
My worry is that this is a FAT TAIL probablity.
Woe is us until the midterms.
As we’re told, the stock market is not the economy, and like so many things these days it’s also not even a reliable indicator since we can’t trust our lying eyes anymore. Am I the only one who remembers that the stock market went up under Biden in 2021 only because he was reaping the rewards of the fertile ground left to him by Trump? And what about when the stock market went up under Biden last year only because it was anticipating Trump’s return to office? So, it’s definitely not Trump who is making the market go down. I think it’s the damn Constitution. Those pesky term limits are now being discounted in the S&P, and sentiment is pinned in sadness as we realize we’re not going to have Trump around forever to drive the market higher. The only question is which pops first – the Trump put or the Constitution?
I’d argue consumer spending, the housing boom, and the stock market boom are all reflections of low unemployment and in some cases over-employment.
Even with the trillions in support housing received as a result of historic low mortgage rates and ramped up liquidity, if people aren’t working jobs that can sustain those mortgage payments, they aren’t buying houses. Stimmy payments aside, main street isn’t buying stocks unless they have extra money available to purchase them with, again the employment boom and rising wages comes to the rescue. And spending again goes back to having a job that affords you the capacity to buy a luxury car, watch, clothes, home; over entry level versions.
By killing the jobs market, Trump is going to prove that Bidenomics’ support of labor was the key to a strong and healthy economy. If only he hadn’t made eggs so expensive!