Stocks Bounce Back, Trump Would Shut
Wednesday, February 7, 2018
Vol. 7, No. 38
The VIX: Wall Street rebounded yesterday with a 567-point gain for the Dow Jones, putting a stop at least for a day to the world-wide stock slide. Analysts say that investors realize the fundamentals of the economy are still strong.
These days, heavy trading like Monday’s nearly 1200-point selloff are driven by computers, robots and, algorithms that seize on a human-induced trend and amplify it, sometimes out of all proportion.
Complicating matters, some stock watchers say that President Trump’s efforts to stimulate the economy — the tax reform bill among them — may have a reverse effect. Andrew Ross Sorkin writes for The NY Times, “Investors believe his policies to stoke growth are going to work so well that they will overheat the economy, and force the Federal Reserve to try to slow things down by raising interest rates faster than expected.” He says, “Sometimes you can have too much of a good thing. Don’t forget what set off the plunge on Friday: better-than-expected job growth numbers.”
Adding to that is a variety of technical things that kick in. One of the trading triggers is what’s called the “VIX,” the Volatility Index, a measure of how much risk is at play in the markets. Some traders and financial instruments — derivatives, for instance — live and die by the VIX, which has spiked in the last two days.
MarketWatch reports on a trader who posted a tale of woe. “I’ve lost $4 million, 3 years worth of work, and other people’s money,” the man wrote. “Should I kill myself?”
Fellow traders advised him not to short his own life.
Son of Shutdown: As Congress tries to cobble together a spending deal to avoid another government shutdown tomorrow, President Trump says he’d be happy to see a closure if he doesn’t get his way on immigration and border protection. “I would shut it down over this issue,” Trump said. “If we don’t straighten out our border, we don’t have a country.”
Both the Senate majority and minority leaders say they’re encouraged that they can reach a deal.
But the Democrats don’t want to build Trump’s long-promised border wall and he’s accused them of not caring about national security. “If we have to shut it down because the Democrats don’t want safety,” he added, “then shut it down.”
Adding fuel to Trump’s fire is the death of Indianapolis Colts linebacker Edwin Jackson, who was hit by a car driven by an illegal immigrant from Guatemala. Trump tweeted, “So disgraceful that a person illegally in our country killed @Colts linebacker Edwin Jackson. This is just one of many such preventable tragedies.”
Small Hands: National displays of military hardware are generally the trademark of countries run by dictators; Russia, China, and North Korea among them. Shiny tanks and missiles roll down the streets with political leaders standing grimly high in the bleachers. President Trump came away from a visit to Paris last year impressed with France’s colorful Bastille Day parade that displays everything from tanks, to special forces, and mountain troops all dressed in white. It’s a national celebration and a rare event in a free country.
The Washington Post reports that President Trump, who is fascinated with the military, now has the Pentagon in the early stages of planning a national display of military might in Washington. “The marching orders were: I want a parade like the one in France,” a military official told the Post. “This is being worked at the highest levels of the military.”
And the lowest levels in the White House.
Folding His Hand: Las Vegas casino mogul Steve Wynn has resigned as CEO of his own company following accusations that he is a serial sexual harasser and abuser of his female employees. He denies in all. In what has become a familiar mantra of men accused of this kind of behavior, the 76-year-old Wynn said in a statement, “I have reflected upon the environment this has created — one in which a rush to judgment takes precedence over everything else, including the facts — I have reached the conclusion I cannot continue to be effective in my current roles.”
Long-term Parking: The private company SpaceX yesterday launched the biggest and most powerful rocket currently in use called the Falcon Heavy. Entrepreneur Elon Musk, who also runs the Tesla car company, sent up a payload one cherry-red Tesla roadster that will end up orbiting the sun. At the wheel is a dummy dressed in a spacesuit, and the stereo is blasting David Bowie’s “Space Oddity” on an endless loop. The rich are very different from you and me.