One of the things Trump has been able to say since taking office is how great the stock market is doing. Or was doing. Starting around the end of November, due to many factors including instability, Trump's manufactured trade war and the looming shutdown, the market started to tank. Yes, I know we were in a bubble and it was impossible to sustain the highs we were at, but things started to slide down and FAST.
You'll notice Trump stopped talking about the stock market except to blame the Federal Reserve for raising interest rates. I guess Trump thought they should stay at 0% forever.
There is a negative correlation between the stock market and government backed bonds. When the stock market is unstable, people invest more in the safer option of government bonds and vice versa. However, Trump can't take any credit for high investment in government bonds. Not flashy enough. Doesn't make his Wall Street Cronies money.
We know the shutdown to end all shutdowns is due to his petulance and immaturity. He insists we have a wall. No one wants the wall. He stomps his foot, says "bye, bye" and goes home. This is causing upheaval in the stock markets as well. You know because every once in a while he tweets some false claim about how we are about to have a major breakthrough with China on trade talks.
With the government shut down, the US Government looks unstable. We look like maybe we can't be counted on to fulfill the promises made when you invest in US bonds.
My thoughts (and they are just thoughts because I haven't had the time to fully research this) is that Trump's Shutdown serves 2 purposes for him; it gives the impression to his 30% of diehard followers that he is fighting to fulfill his campaign promises against those incalcitrant, crime-loving Democrats and it makes our Government look unstable. So maybe investing in Government bonds is NOT a great idea right now and investors should put their money back into the stock market?
Could it be that Trump is also shorting government bonds with his shutdown? Is he smart enough to think that far ahead? Or does he just want a big old wall and will sit down on the floor holding his ball until he gets what he wants?
Anyway you look at it, we are fucked.
You'll notice Trump stopped talking about the stock market except to blame the Federal Reserve for raising interest rates. I guess Trump thought they should stay at 0% forever.
There is a negative correlation between the stock market and government backed bonds. When the stock market is unstable, people invest more in the safer option of government bonds and vice versa. However, Trump can't take any credit for high investment in government bonds. Not flashy enough. Doesn't make his Wall Street Cronies money.
We know the shutdown to end all shutdowns is due to his petulance and immaturity. He insists we have a wall. No one wants the wall. He stomps his foot, says "bye, bye" and goes home. This is causing upheaval in the stock markets as well. You know because every once in a while he tweets some false claim about how we are about to have a major breakthrough with China on trade talks.
With the government shut down, the US Government looks unstable. We look like maybe we can't be counted on to fulfill the promises made when you invest in US bonds.
My thoughts (and they are just thoughts because I haven't had the time to fully research this) is that Trump's Shutdown serves 2 purposes for him; it gives the impression to his 30% of diehard followers that he is fighting to fulfill his campaign promises against those incalcitrant, crime-loving Democrats and it makes our Government look unstable. So maybe investing in Government bonds is NOT a great idea right now and investors should put their money back into the stock market?
Could it be that Trump is also shorting government bonds with his shutdown? Is he smart enough to think that far ahead? Or does he just want a big old wall and will sit down on the floor holding his ball until he gets what he wants?
Anyway you look at it, we are fucked.
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