Why Trump Claiming Ownership Of “Markets” May Not Be As Crazy At It Seems
by Mark St.Cyr
I want to pose something which I know currently flies in the face of what many (and of those many, many I respect immensely) are currently cautioning the President against. i.e., Claiming credit for the current rise and new lifetime highs in the “markets.”
As of this writing the Dow™ is within spitting distance of (once again) topping the previous never-before-seen-in-human-history-all-time-high, setting the new benchmark at 22,000. (By the time I publish it may be a fate accompli)
Many are calling for caution when it comes to the President taking credit implying this seemingly great “win” could end up being nothing more than a “boat anchor” around his reputation should the “markets” falter, turning a once worthy accolade into the proverbial “kiss of death” signaling the scapegoating to begin in earnest.
Not only is there a lot of merit in that argument, I would also agree with it wholeheartedly if not for just one thing. The President himself, and his long history of how he frames both arguments for accolades, as well as eschews (as in publicly lambaste) those who question his perceived accomplishments.
All one has to do is look at his past performances on both TV, and in public, and it’s there. Again, the clues are everywhere, and he’s been doing it for decades. i.e., I believe this is nothing new. It’s only new to the current political mayhem.
Why I bring this up is in respect to one of the President’s most recent tweets. To wit:
I would like to bring your attention to the one thing in which he is absolutely both defining, as well as being correct with. And it is this: “Was 18,000 only 6 months ago on Election Day. Mainstream media seldom mentions!”
At first blush this appears to be a “Well…Duh!” type statement. However, if you think about how one would use the above as to frame that “Duh” observation into a sword-and-shield for defense against the possible torch-and-pitchfork bearing hordes should the “markets” falter? Defining the message, terms, all while taking credit in a believable construct – isn’t as crazy as it first appears. Especially if you can not only evade the “horde”, but possibly redirect their anger away from you – and onto another. i.e., Welcome to Machiavelli 101.
I don’t know if I’m right or wrong. And there’s always the chance he’ll over-reach, or claim credit (even if justified) at the wrong time. Only time will tell as the events unfold. As always, we shall see. Or, as the “tweets” arrive.
I am still of the opinion this “framing” (if that’s what it turns out to be) is being put into the public arena for use as a foil against the Fed. (along with congress) when the effects of their current policy moves begin to exert themselves when the “hopium” trade that has been incessant since the election (precisely what Trump is claiming credit for) evaporates, when it’s self-evident every piece of legislation that propelled the “hopium” trade is understood not just to be DOA, but dead and buried.
I made the case as to why the Scaramucci appointment should give the Fed. concern for it might be covertly signaling exactly how that argument might be framed and used, because of Mr. Scaramucci’s background. Just because he is now been replaced doesn’t change how I still believe Mr. Trump might fight the supposed accusations (e.g., get the blame) should the “markets” begin tumbling. It’ll just now be with different players, but that premise remains.
Just as reminder let me repost the chart I used. To wit:
To reiterate: The past 6 months rise in the “markets” has been on nothing more than a “hopium” trade of what was presumed to be a slam-dunk of Obamacare repeal, meaningful tax relief, and infrastructure spending.
And – for this point needs to be pounded into that discussion: All in direct contrast, and opposition, to the resulting effects that would normally be taking place with the Fed. embarking on a tightening schedule, along with balance sheet reduction, into ever deteriorating data for a supposedly “data dependent” body. i.e., The case can be made the only reason why we’re here is – The Trump Bump. Period.
When it comes to that second line in the President’s tweet: Is he wrong about the “media seldom mentions”? Hint: Think back to all those former “record highs” represented at the top edge of the highlighted box in the above chart. How many times over those two years did the media incessantly state (especially the mainstream media cabal of business/financial “news” shows) “Another Record High!” Now look at the moniker’d “Trump Bump” progression. Nearly every week, if not day, and the reaction? _________ (insert crickets here.)
Congress, along with the Fed. (in my opinion) are the ones who should be worrying if this market indeed begins to falter. Unlike the President – I don’t believe they have the argument to stand on that he has. I also believe many are unwittingly claiming credit for “stopping” things which have far more potential to blow-up in their own faces than they are calculating.
And the most explosive tool at the President’s disposal is one they believe is unassailable. e.g., Their own words.
As always – we shall see. Or, as the “tweets” tell us.
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About the author Mark St.Cyr