U.S. stocks tanked again after their worst trading week in a decade. This drop came after "Not my President" Trump criticized the Federal Reserve on Twitter and Steve Mnuchin caused deeper concern.
This was Trump’s “lump of coal” Christmas gift for investors, shareholders, retirees, and mutual fund managers. Yesterday was the worst trading day ever - on a Christmas Eve. And it followed on the heels of markets finishing their worst trading week since the 2007 George W. Bush financial flop.
And Treasury Secretary Steven Mnuchin issued a puzzling statement, saying he'd spoken with the heads of the biggest U.S. banks to reiterate the strength of the financial system and to confirm their reserves of cash.
It would be quite normal for the treasury secretary to talk to the heads of big banks. This happens all the time. But the Treasury put out a press release on a weekend, before a holiday, assuring market participants that nothing was happening, which is not something that anybody had previously worried about.
And it's a weird statement. It like, unnerved a lot of market participants. Does Secretary Mnuchin see something that we can't see; is there something hidden?
We do have problems in a number of quasi-financial markets. The leverage loan market, for instance, is having some issues, where financiers are losing money as interest rates rise.
Is the president simply trying to find someone to blame for this stock market slide?
• Annie Lowrey of "The Atlantic.":
"The president... sees a rising market as being a sign of his success. He points to a rising market as being a good indicator of economic health, which it really isn't. [Now] he's looking for somebody [else] to blame now that the market is going down.
It's really important to note that the Federal Reserve is not responsible for the market going up. It doesn't see the market going up as being its responsibility. It is responsible for two things: 1) price stability and 2) unemployment."
No way to spin it when it is spinning out of control.
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