US stock market slump, Trump blames someone else

The US stock market is having a bad week, slumping to lows for the year and said to be ‘on the cusp of a bear market’. President Donald Trump praised himself when the market rose to record highs, but as has become typical of him, he blames someone else when it dives.

Trading has a few hours to go before closing for Christmas but it is not looking good for the last five days:

The US markets closed at 1 pm on Christmas Eve. Dow Jones  closed on 21,792 , down 653.17 (2.91%) for the day.

Nor for the year:

New York Times: Stock Market Rout Has Trump Fixated on Fed Chair Powell

President Trump has unabashedly hitched his political fortunes to a rising stock market. Now, with stock prices in retreat, he has become increasingly fixated on the idea that one man is to blame for the recent rout: Jerome H. Powell, chairman of the Federal Reserve.

After the Fed raised its benchmark interest rate on Wednesday, the fifth consecutive quarterly increase, Mr. Trump fretted to aides that Mr. Powell would “turn me into Hoover,” a reference to the man who was president in the early years of the Great Depression.

Mr. Trump has said choosing Mr. Powell for the Fed job last year was the worst mistake of his presidency, and he has asked aides whether he has the power to fire him.

But the volatile stock market, which just posted its worst week since 2008, is falling in part because of Mr. Trump’s own policies, including an escalating trade war with China, a shutdown of the federal government and the fading effects of the $1.5 trillion tax cut Mr. Trump ushered in at the end of 2017. While the Fed’s rate increases have upset investors — who seem to have a darker view of economic growth than the central bank does — some analysts said Mr. Trump’s musings about the Fed would only exacerbate anxieties.

Mr. Trump’s economic advisers scrambled over the weekend to reassure markets that Mr. Trump was not, in fact, planning to fire Mr. Powell. Treasury Secretary Steven Mnuchin tweeted what he said was a quote from Mr. Trump accepting that he did not even have the power to do so.

While Mr. Trump has turned on his chairman, the Fed’s trajectory should not have been a surprise.

When Mr. Trump chose Mr. Powell as Fed chairman in the fall of 2017, he said, “Based on his record, I am confident that Jay has the wisdom and leadership to guide our economy through any challenges that our great economy may face.”

Mr. Trump also chose three of the other four members of the Fed’s board, all of whom joined Mr. Powell in voting for all four 2018 rate increases.

In conversations with friends and advisers, Mr. Trump has acknowledged responsibility for the selection of Mr. Powell. He told Stephen Moore, an economist at the Heritage Foundation, that it was “one of the worst choices I’ve ever made,” according to Mr. Moore.

Sarah Binder, a professor of political science at George Washington University, said presidents had often tried to shape Fed policy, but the current episode stood apart because Mr. Trump appeared to be acting against his own interest in a stable economy.

“I think what is the unusual part here is that it seems the president has created the crisis,” she said. “His intervention certainly seems to be making things worse for him and worse for the Fed and worse for the economy. It’s just very shortsighted, and we’re not used to that.”

@HoarseWhisperer

The punchline of Trump’s meltdown over the markets and Fed:

– Every sane human knew we were in for a bumpy landing after the long recovery under Obama

– Trump did everything possible to make that worse

– That was a recipe for disaster

Trump is now blaming everyone else for his ignorant, moronic decision to steer the Trumptanic economy right into the iceberg A competent president would have focused on things that fuel growth like:

1) Expansion of trade – rather than the opposite: trade wars

2) Pro-working class tax relief to fuel consumer spending

3) Expansion of “green” incentives to grow renewables and further reduce reliance on oil, gas and coal

4) Small business incentives to spur the true engine of the labor force

5) Reductions of loopholes and credits which shield large corporations from taxation and incent moving business abroad

6) Efforts at controlling health care costs since every consumer dollar spent toward HC isn’t spent elsewhere in the economy

7) Managing down runaway enthusiasm about the economy and growth since it leads to consumers spending their way into deeper debt which then produces a nasty backlash when the bills come due.

Every step of the way, Trump has done the diametric opposite of what he should have.

He steered the economy out of smooth waters toward calamity – and along the way, he robbed the ship of fuel to enrich the already rich.

Now, the battleship can’t be turned fast enough to help and he has no effing clue what he did wrong let alone how to fix it.

Meanwhile, over on Main Street, USA, average Americans who bought his bullshit deficit-spent thinking they’d get a present on Tax Day.

A cooling economy. Consumer wages going sideways. Bills going up. No money in the treasury to help.

This is going to be a sh**-show.

Trump inherited an eight-year expansion. A healthy economy with some navigable challenges.

He burned the whole damn thing down by being an incompetent, narcissistic moron… …and steered the entire economy straight toward full-blown recession.

This is going to be ugly.

Stock markets can be fickle things, but after a good run for years it was on the cards that there would be a correction, or worse, It looks like heading for worse right now, regardless of who is to blame – but the big buck stops at the President’s desk.

The US stock market may drag the world down with it. We can hope that heading into the holiday period it may not be so bad here in New Zealand,