On this thread, it’s a little after midday, and the markets are decidedly unhappy. All three primary indices are down in excess of 3%, although they still have time to recover. I think this time around, everyone’s going to agree that this all about the politics. CNN certainly thinks so, blaming China’s reaction to our tariffs with a fine selection of their own, as well as noting Trump’s tweets attacking Amazon, owned by Jeff Bezos, and who also owns WaPo, which is generally features critical coverage of President Trump. They must have singed his tailfeathers recently.
I don’t put a lot of faith into the Amazon tweets being a source of the stock sell-off. We own some Amazon stock, but we’re a bit split on actually using them. I order virtually nothing from them in terms of generally available commodities, as things tend to arrive broken and I prefer to see a broad variety of suppliers competing, so I direct my dollars to other retailers when I can. Meanwhile, my Arts Editor uses them quite a bit more.
But the China tariffs have to have the Iowa farmers in a real quandary. Iowa went for Trump in the last Presidential campaign, and, in fact, I happened to drive through the western corner of Iowa just prior to the election and was appalled at the nearly uniform blanket of Trump / Pence signs, as if they had completely lost their self-respect. CNN is reporting the tariffs will include products such as pork & meat – and if that doesn’t affect the farmers directly, it may do so indirectly (animals gotta Eat!), and also indicate the future may hold more tariffs that could more directly impact those farmers.
Which is all sort of funny since apparently Trump boasted just last week that we’ve never seen such a fine economy as the one he’s running. Of course, Presidents don’t typically “run” the economy, as that’s more a Federal Reserve responsibility, although policy choices such as the upcoming tariff war will have its effect.
And stock markets are also poor proxies for evaluating the economy. Unemployment and GDP are far more typically used.
But the markets can function as a prognostication mechanism, and right now money is saying that the President’s behavior is not conducive to prosperity. That’s something to keep in mind going forward – a whole lot of fairly smart people just said No!
