Late last month, following comments from Fed Chair (and man who is regretting it already, where “it” can mean any number of things) Jerome Powell at a central banking conference in Sintra, Wilbur Ross emerged from his crypt to reiterate his long-held contention that the Trump administration’s trade policies don’t bode ill for the U.S. economy.
In an apparent reference to Powell’s warning that the Fed is hearing about “decisions to postpone investment [and] postpone hiring,” Ross said that “anyone who thinks the economy is being wrecked doesn’t know what they’re talking about.”
Wilbur, who does know what he’s talking about, went on to accuse America’s trade partners of falling back on all manner of “elaborate, non-science-based” excuses for restricting U.S. imports including, but by no means limited to, bogus references to diseased chickens and sick cows.
That was on June 21. Fast forward four days and global equities were in free fall following multiple reports that Trump was planning to use an arcane emergency powers law to restrict Chinese investment in U.S. industries. Fast forward another 48 hours (so, to last Wednesday) and the President appeared to relent in the face of market pressure, with the administration saying that instead of relying on executive power, they’d look to modernize CFIUS.
Larry Kudlow’s protestations aside, pretty much everyone took that as a sign that Trump was concerned about U.S. equities. Remember, this is a balancing act. Trump needs to push the trade envelope far enough to bolster the GOP ahead of the midterms, but not far enough to accidentally trigger a market crash, because a market crash would imperil what JPMorgan’s Marko Kolanovic has variously characterized as the administration’s “market scorecard.”
Well, guess who wants you to think Trump doesn’t care about the stock market in the context of trade? Wilbur Ross or, more appropriately, the animate remains of Wilbur Ross, which showed up on CNBC Monday to say this:
Got that? “The stock market hates uncertainty, everybody hates uncertainty, and the worst fear is the fear of the unknown” – some philosophizin’ from a man who spends every waking hour asleep. Any “Waking Life” fans out there?
But Joe Kernen wasn’t going to let Wilbur off the hook that easily. After all, Joe is a guy who likes to pin Wilbur down on the specifics. Like that time back in May when Joe asked Ross the following about the administration’s plans for landing spaceships on asteroids and mining for mineral riches:
WHAT IS THE ACTUAL TIME FRAME FOR WHEN THAT WILL BE FEASIBLE? WILL THAT BE FIVE YEARS, TEN YEARS, 50 YEARS, DO YOU KNOW?
So Joe being Joe, he asked Wilbur the question everyone else is just dying to ask Wilbur: “What’s the number” on the S&P that would cause Trump to completely rethink things?
And as you can see in the clip, Wilbur insists that “there’s no bright line level of the stock market that’s going to change policy.”
Melissa Lee – seemingly emboldened by Joe and his immortal hair – presses Ross further, asking if there’s a “dull line”, at which point a visibly irritated Wilbur responds that “the last thing” the administration is “going to do” is announce “that there’s a certain level in the stock market that will change policy.”
Time stamp that, folks. Because at some point later this year, we’re all going to be able to look back on that statement and laugh.
The only reason Trump might not have a “bright line level” in mind on the Dow when it comes to when he would consider slamming on the brakes when it comes to upending the future of global trade and commerce is because he has shown time and again that he doesn’t understand the difference between percentage gains and point gains.
But you can bet your ass that if the Dow were to shed enough in percentage terms to prompt the media to start making unfavorable comparisons between “his” stock market and “Obama’s” stock market, he’d reconsider this whole protectionist push – and right quick.
On that note, I’ll just leave you with a fun screengrab that shows you every time Trump has mentioned the stock market in a tweet since the inauguration:
This article provided by NewsEdge.