Over the course of the 36 years Donald Trump has been President, "we the people" have been trying our best to gently warn him that live-brag-blogging the market on Twitter is not a great idea.
Even if the (previously) inexorable equity rally was directly attributable to Donald Trump and not to what it's actually attributable to (i.e. central banks and the "Goldilocks" combination of well-anchored inflation and synchronous global growth), it wouldn't be a good idea for him to go out of his way to tie the fate of the market to the public's perception of his success/failure as President.
The reason that's not a good idea is obvious to everyone but Trump.
If Dow Jones = Donald Trump on the way up, well then it stands to reason that barring some plausible explanation for why those two "people" are no longer equivalent, his base is going to go ahead and assume that Dow Jones = Donald Trump on the way down too.
The worst part about this scenario for Trump is that he's made a series of increasingly ridiculous claims about the market that large swaths of the public do not know are ridiculous. Back in October, for instance, he went on Sean Hannity and said that "in one sense", rising stock prices cancel out the national debt.
That's obviously absurd, but his base doesn't know it's absurd so now, there are probably hundreds of thousands of Trump supporters tuning into Fox Business every evening and wondering how much the national debt rises for every 1,000 points the Dow crashes.
His bombast about the market is going to be impossible to undo among his support base. It's one thing to call the equity rally a "big fat ugly bubble" when you're a candidate and then turn around and claim that while it was a "false market" when Obama was President, it's real now. Sure, that's a laughable claim to those of us who are rational, but let's face it, being rational isn't something his base has ever been accused of, so they bought the whole "Trump rally" meme hook, line and sinker.
But now, Trump faces a far more daunting task. Before, he only had to convince his base that something which wasn't "real" before is suddenly "real" because he he's President. That's a kind of mindfuck wherein the people that myth is being foisted on are inclined to believe it because they participated in getting him elected. So in a way, by believing he's the cause of the ongoing rally, they can feel like they too played a part in creating prosperity. That creates a psychological incentive to believe something that isn't, on the surface, believable.
Now, assuming the stock rout continues, Trump is going to have to take this one step further. Now, he's going to have to claim that a rally which wasn't real when Obama was President subsequently became real when Trump was elected, but now that the rally is over, the losses have nothing to do with Trump.
Not even the stupidest Trump voters are going to buy that. Unless of course he can find a scapegoat. And that's where this gets either funny or dangerous, depending on who the scapegoat ends up being.
If the scapegoat is the Fed and Trump ends up pulling an Erodgan by ranting about how interest rates need to be lower at every campaign rally, well then that will just be funny because let's face it, the Fed was never wholly "independent" in the first place so if Jerome Powell becomes a Trump puppet then so be it.
If, on the other hand, he tries to posit some kind of "deep state" conspiracy (which would be Erdogan-esque in its own right) involving supposedly nefarious bad actors who are deliberately driving the stock market lower in an effort to make him look like a moron for tweet-bragging about the rally, well then that's more serious. Because then what he'll be doing is suggesting that not only is there an American "deep state" that's operating to undermine his presidency (a myth he spends each and every waking hour perpetuating), but that the same "deep state" is now deliberately wiping out Americans' 401ks. Remember: "how's your 401k doing?" has become a go-to slogan of Trump's.
So here's hoping Trump chooses the lesser of two evils by simply further eroding the Fed's independence. Everyone knows monetary policy is never going to be any semblance of "normal" again and no one believed the Eccles gang was "independent" in the first place, so we don't really lose much if Trump starts bullying Jerome Powell. In fact, we'd actually gain something in the way of comic relief because there are all manner of Twitter nicknames Trump could dream up for someone whose first name starts with "J" and whose last name starts with "P". We're probably just a couple of thousand Dow points away from #JackoffJerome and/or #PissPoorPowell and/or #FailingFed.
Oh, and by the way, we're at Dow 23,450 as I write this. Which means we're now below where we were when Trump tweeted the following on November 30:
Only another 11,500 points (or, as that's now known, 9.5 Mondays) on the downside and we can all tell Trump he's no better than a #CrookedHillary.