It’s funny: The people driven most crazy by Donald Trump aren’t Trump’s detractors. Rather, the people most perturbed by Trump’s antics are his own fans. His own voters. Or at least in the macro-market sphere.
Trump’s determined that every headline’s going to be about him, and that no one else gets any space above the digital fold. Because he’s President of the United States, that goal’s eminently achievable, particularly given his penchant for stirring up controversy.
It’s frustrating, I’m sure, for some of his supporters to wake up every morning to another deluge of Trump headlines from the financial media, but here’s the thing: He’d have it no other way. His vainglory demands it, but beyond that, it’s strategic. Ask Steve Bannon. This is Bannon’s “flood the zone” strategy.
I dealt with this a lot last term, and I’m resigned to dealing with it regularly this term too. I got a message on Tuesday morning from an apparent Trump voter complaining about the extent to which he (Trump) plays prominently in “nearly every article.” My readers, this person remarked, surely notice.
Canny, that one. Discerning to a fault. It is indeed hard to get through a day of macro-market coverage without mentioning Trump considering he’s quite literally the only thing that matters in the macro-market universe right now.
How does one go about taking such “criticism” seriously? How do you answer someone feigning confusion at the volume of Trump coverage on a site dedicated to covering the intersection of politics, macroeconomics and finance, at a time when Trump’s rewriting the rules of global trade and commerce with the effect of triggering black swan-type moves in markets?
That’s what I mean when I say the people most perturbed by Trump’s antics are often his own fans and his own voters. The truth’s as simple as it is obvious: Everything he says and does is news, and the vast majority of his proclamations and actions are inescapably moronic at best, and wholly indefensible at worst. So every morning, his supporters are bombarded with what amounts to more proof of their own gullibility and ignorance.
That makes them uncomfortable, and rather than reflect, they take it out on the rest of the world by pretending everyone should just ignore the President of the United States, which is impossible even in “normal” times, and even when markets are calm, to say nothing of the current environment.
The figure below underscores the message. It shows just how dramatically Trump’s “Liberation Day” tariff debacle shifted the global macro debate. Regular readers will recognize the chart or, more to the point, not. Because it looks nothing like it did last month.
Subjective “hard landing” odds, which had never exceeded 30% in BofA’s closely-watched Global Fund Manager Survey, jumped from 11% to 49% in the April vintage of the poll, released on Tuesday.
Do note: Those subjective odds were just 5% when Trump took office. So, the trade war, and specifically the “Liberation Day” escalation, prompted a 10-fold increase in global recession probabilities as they exist in the minds of fund managers.
“No landing” odds — i.e., the subjective chances that the US economy will continue to steam along unimpeded, or even overheat again — plunged to just 3%. They were 38% in January.
Relatedly, the net share expecting a stronger global economy over the next 12 months plunged to a record low in the BofA poll. As the figure below shows, more than eight in 10 expect weaker global growth now.
Unfortunately, that series maps pretty well with the YoY change in the S&P. A full “catch down” would translate into a very nasty selloff.
164 fund managers with $386 billion of AUM between them responded to this month’s poll.
I suppose I should’ve just swept this under the rug, though. Not wanting to hurt any feelings and all.
I hear the Trumpers are fans of taking their medicine. So give ’em a taste. All such future complaints re Mar-A-Lardo Uber Alles should be met with denial, nonsensical counterarguments and declarations of Fake News!
Are we still talking about “landing the plane” post-Covid? We need to move on now. What we had was a “touchdown.” It was just inches from a soft landing, the wheels actually touched the ground, and then Trump got elected and changed everything–a “hijacking” if you would–and now we are back in the air, having never stopped, and headed God knows where. Maybe that sounds like a “no landing” scenario, but that would completely ignore the dramatic change in direction we have just made. I don’t think we can hold Jerome Powell, or Joe Biden, responsible for what happens next past that point. We have embarked on a new adventure, and it is all on 47’s shoulders now.
Hail Trump !! Now, what was I going to say…….