Wall Street Highlights The Trump Genius

“I’m the smartest person in the room” or words to that effect have punctuated President Trump’s first two years in office.  Reflecting upon 2017 and 2018, one can see an opportunists who has picked the lowest of hanging fruit and cut as many corners of established good manners and protocol to claim his “wins”.  Now at the close of 2018, the world (and hopefully Americans) can see what ill considered, opportunistic, and uncoordinated adventures can bring.

The Wall Street Journal reported today more bad news for American farmers.  Japan has announced it will reduce agricultural tariffs as part of its role in the “Trans Pacific Partnership”.   President Trump rejected the TPP and pulled America’s participation from it.  Now American farmers can look forward to increased competition in Japan from Canada, Australia, New Zealand, and the EU.  This type of competition usually means lower prices and lower sales. Wall Street sees this.

President Trump’s rejection of the Iran Nuclear Agreement and withdrawal from the deal has changed little other than providing a wake up call to other nations that there is a new sheriff in town and one that can’t be trusted.  President Trump complained about Iran’s “bad behavior” in the region, not any violations of the agreement, as his reason to void the agreement.  And this past week, President Trump order all US troops out of Syria opening the door wide for increased Iran access (and bad behavior).  What was he thinking?  Wall Street sees this.

The President also saw if fit to stand up for Saudi Arabia over the third world-like killing of Jamal Khashoggi.  There has been plenty of media attention and condemnation but hardly an uproar from banks and industry.  The President spoke volumes about where morality and the rule of law stood with his Administration.  Wall Street sees this.

The President’s wall (not Wall Street) between the US and Mexico has prompted a Presidential temper tantrum.  President Trump has chosen to shut down about 1/3rd of the US Government until he receives funding for a boarder wall.  Forgetting for a moment that almost everyone informed about restricting undocumented immigration rejects the notion that any type of wall will eliminate smuggling or illegal immigration, the President continues to link national security with the wall.  If the President was serious about this issue, he would negotiate a trade-off involving DACA residents and increased spending on the Wall.  The President is myopic and only seems to see his role to bring satisfaction of his “base”.  Wall Street sees this too.

The stock market (Wall Street) has never been accused of being overly moral or ethical.  Wall Street is about making money for and by investors.  Unfortunately, stocks and bonds make up a large part of everyday citizens wealth and when the Market does well, so do a broad cross section of Americans.  

And to be sure, there are behaviors by Wall Street insiders which can prolong periods of market growth and soften the pain of retreats.  But there are events (like period mild recessions) that Wall Street can not make pretty and, in those situations, Wall Street becomes a herd.  “Herd Mentality” takes over and sharp swings in stock prices rules the day.  Sooner or later, unless there are legitimate corrective measures taken by Government policy makers, the natural consequence is sustained market decline.

The month of December has seen this volatility with dramatic drops in stock market valuations.  Pension funds and 401Ks are again seeing their valuations clipped.  A lot of Americans (not just the wealthiest) have less wealth today than 6 months ago.  

Lay these Trump inspired events upon each other along with market volatility, and one should worry.  Our President has driven wedges between the US and its trading partners and created global unstable situations. Wall Street knows this.

While we should not expect any moral or ethical pronouncements from Wall Street, we can expect the Street to act in its own self interest.  Wall Street will take profits when it can and care nothing about who gets hurt.  Sooner or later this instability will permeate “main street” and a recession will set in.  Wall Street knows this.

And “the leader of last resort”, the President of the United States is absent on duty.  How can anyone expect the President’s first two years of accomplishments to predict sound leadership when the country needs it?

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Explore posts in the same categories: Donald Trump, economic growth, economy, Uncategorized, Wall Street

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