Like coroners and journalists, traders really shine when bad things happen to other people. And despite the wider sense of anxiety in the broader American populace, the past seven or eight months haven't exactly delivered the level of calamitous excitement traders clamor for, leading them toward far less productive pursuits.
But now it looks like Donald Trump could finally deliver that sweet, sweet volatility Wall Street has craved so badly. And he has the perfect tool for doing so: the full faith and credit of the government of the United States of America. Via Bloomberg:
The rate on Treasury bills maturing Oct. 12 jumped by as much as 5 basis points Thursday, the largest intraday move since March, after Trump blamed Congress’s inability to increase America’s borrowing authority on the Republican leaders in a series of tweets. The bills, which mature around the time when Treasury is estimated to run out of money unless lawmakers extend or suspend the statutory limit on the nation’s borrowing, are currently trading at 1.17 percent.
This is just a preview, of course. But even now, with the odds of shutdown being drawn primarily from @RealDonaldTrump hermeneutics, markets have already grown noticeably more volatile. On Wednesday, Trump's debt-ceiling dalliance caused the VIX to rise 6 points after falling for four days straight. The last shutdown, Ted Cruz's 2013 magnum opus, pumped trading volume on the VIX up to an all-time high. And who knows what the effects of a U.S. creditdowngrade would be.
For most of the economy, it's a bit of a worry that engine the federal government might seize up and halt because congress won't let an addled septuagenarian build a 3,000-mile wall out of plexiglass and solar panels. But Trump promised he would stand for the forgotten people. Traders, you are forgotten no longer.