Speaking of train wrecks ... Donald Trump.
On Monday afternoon, America's windmill-tilting orange leader took to Twitter to put the presidential stamp of approval on a blockbuster day for stocks, seemingly oblivious to the fact that the gains came on the heels of the worst week for U.S. equities since January 2016.
Last week's egregious losses were of course the direct result of the administration's decision to slap (more) tariffs on China, an effort that effectively enshrines Peter Navarro's view on global trade and commerce into U.S. economic policy.
On Tuesday, stocks reversed Monday's rebound as the vaunted FANG contingent suffered through its worst session on record (click to enlarge):
Given how Trump is increasingly prone to leaning on the stock market when it comes to "evidence" of his "success", you'd think he would be especially careful not to do anything to exacerbate a situation that, as you can see from the chart, got materially worse on Wednesday.
But as noted in the first linked post above, Trump seems to be just as impervious to reality vis-à-vis the stock market as he is to reality vis-à-vis everything else, because now it looks like he's just going to ignore it when stocks fall and tweet about it when they go up.
Earlier this year, he kinda sorta suggested he might adopt the same "strategy" his "good friend" Xi adopts in China when stocks fall - that is, he suggested that people who sell stocks are making a "mistake" and you know what happens to people who make "mistakes" in an autocracy, right?
That wasn't well received, so he apparently decided it's best to just ignore it altogether when stocks go down and to be perfectly honest, that's probably not a bad strategy because most of his base isn't staring at a Bloomie all day, so why draw attention to something bad when you don't have to?
Well anyway, Wednesday's sequel to Tuesday's tech bloodbath was the direct result of an Axios story that "confirmed" what everyone already knows: namely that Trump is "obsessed" with Amazon and that thanks to the (not entirely unfounded) notion that Jeff Bezos the deflationary supernova is having a negative effect on important sectors of the economy, it's at least conceivable that Trump could punish Jeff for WaPo's anti-Trump editorial line by cracking down on Amazon.
And so, that Axios story prompted the worst day for Amazon shares since February 8, despite the fact that Trump's long-running displeasure with the company, Bezos and WaPo was public record (in the truest sense of the term, given that Twitter is where the President vents about Bezos).
Given all of that and given that Sarah Huckabee Sanders went out of her way to dispel the notion that the administration was actually preparing some kind of plan to go after Amazon, you'd think Trump would have had more sense than to wake up first thing Thursday morning and tweet something egregious. But alas...
Although tech is thus far staging a nice rally on Thursday (it's just before noon as I write this), that tweet knocked 30 points of Nasdaq futs. To the extent the stock market is his barometer of success and to the extent tech looks like it might have gone from "wind at the back" to "Achilles heel" for the market, the last thing the wounded bull needs is a strong dose of Amazon "covfefe."
But then again, I guess it really doesn't matter. Because as we've said on more occasions than we care to count, Trump is going to turn into Erdogan before it's over. That is, he's going to end up commandeering monetary policy in the service of keeping the stock market afloat. Obviously, the Fed looking out for stocks wouldn't be anything new and in an irony of ironies, Trump himself repeatedly accused Janet Yellen of creating a "false market" in the course of "doing political things" for Obama.
But it's entirely possible that Trump could go full-Erdogan and end up saying something like the Turkish President said last November:
They say central banks are independent so we shouldn’t interfere. This is the end result because we haven’t interfered. Results speak for themselves.
We will solve this, things can’t go on like this.
Again, that's what Erdogan said in a speech late last year. Read it again and tell me you can't see Trump saying it.
So I suppose if Trump's policies and his various vendettas end up conspiring with Fed hikes to finally kill one of the most enduring bulls in market history, he'll just appoint himself Fed chair.
And if you don't believe me, just ask SocGen's Albert Edwards, who said the following in a note dated Thursday:
The risk is now, with the tide going out on the equity market that the SR jumps higher, growth flounders, and the iceberg of debt rips open the hull of this supposedly unsinkable economic ship. If you want to blame someone, blame the Fed. And I am sure that is exactly what President Trump will do when he loses patience and moves to remove their independent status.