UBS Director Blames Trump White House for Dow Jones Sell-Off

[cybersofts]

Art Cashin, managing director of trading floor operations for investment firm UBS Financial Services, has firmly blamed United States President Donald Trump for the stock market volatility that caused the recent Dow Jones Industrial Average sell-off.

Veteran stock market trader Cashin blamed the latest government shutdown and Trump’s attacks on the Federal Reserve for the Dow Jones sell-off, telling CNBC:

    I think we lost maybe a couple of thousand points that we didn’t need to because of the disruptions that we saw.

Cashin told CNBC that “more quiet” from Washington could have allowed stock trading averages to recover, as expected end-of-year selling came to an end.


The Federal Reserve is Normalizing Rates

Dow Jones Industrial Average | Source: TradingView


The Federal Reserve is bearing the brunt of Trump‘s critiques over economic threats as it continues to raise interest rates to more normal levels.

Lower interest rates enjoyed by the US and around the globe over the last decade were a direct response to the threat of major economic depression in the aftermath of the banking crisis. They formed part of a strategy of quantitative easing (QE) which is now morphing into “normalization” as central banks cease boosting economies to let them operate under their own natural mechanisms.

Higher interest rates combined with trade woes and stock market fluctuations are fueling recession fears. More hikes from the Federal Reserve may cut into Trump’s high hopes for the US economy. Trump believes the Federal Reserve is raising interest rates too quickly. Cashin said:

    The president doesn’t seem to realize that the more he talks about what the Fed should do, the more that inhibits the Fed from doing it because they don’t want to look subservient to what’s going on. So that’s a bit of a problem.

Trading expert Jack Bouroudjian, chief economist and co-founder of the Universal Compute Exchange, agreed with Cashin, predicting the stock market could form a V-shaped bottom — meaning that stocks are mispriced at the top of selling. Bouroudjian said:

    Taking a little froth out of the market…is probably the best and healthiest thing we could possibly ask for.

The Dow ended Friday trading 0.33% down and up slightly across the entire trading week despite massive mid-week plunges which followed impressive, albeit uneven, rallies.


Reference: https://www.ccn.com/ubs-director-blames-trump-white-house-for-dow-jones-sell-off/

[Kevin77]

Politics and economics are tied together, just couple months ago people were claiming the biggest increase in US history like 4%+ and so forth and made Trump the king because of it, today we are blaming Trump for the sell off and the bad markets. He definitely has a lot of part in the markets and why things go down and all that but lets not forget that even tough he is the president he is just one man, there are bigger issues that lead to him being the president while he clearly is not fit for it.

The republicans have always been in favor of capitalists and making money for themselves instead of making the country better, even tough democrats are not any matter the last republican president left the biggest bear market in history for a democrat to fix and just as democrat one fixed it another republican scooped it up and made it worst again. We just need to fix the issue from the core instead of blaming one puppet.

[Tytanowy Janusz]

DJI, SPX, NASDAQ are going down due to the same reason why bitcoin was beeing dumped... because it was pumped like stupid just beafore. 10 years of constant grow and finally we are at a moment where "alwais growing asset" start to fall and everyone is running away because most of its holders first time seeing thing like that. Saying that it happend because trump wrote something on twitter is shittalk propaganda made by huge investors that didnt sell yet and they need demand from those "smart guys" thinking that "scared street investors are selling because of Trump tweet". Stocks are waaay away from where it should be. Current prices are similar to situation where you can buy 1 carrot for 1 $ or company creating 1 carrot a year for 200$ hoping that someone will buy it from you for 300$. Its ridiculus. Who would invest like that? Who would buy company knowing that it will not earn for its current price for next 200 years? US stock market (not only US) is bigger bubble than bitcoin was and we must understand this and stop blaming Trump twitt for ridiculus stock prices finally bursting.

Investors are selling that panically not because of trump twitt. They are selling because they know thay their assets are worth 10 times less and they bought only because its growing constantly for 10 years. If prices was right noone would sell 1 carrot for price of half carrot due to twitt. But everyone will sell carrot for value of 80 carrots even if they bought for value of 100 carrots because he dont know where the bottom is and the bottom can be close to real value.

[dothebeats]

Of course, Trump always has his part on the sell-offs and bad economic events happening everywhere, as he was also the reason why some things are on a shit-storm right now starting from his trading relationship with China. Also, it's not just Trump that's the primary reason for the sell-off, one should also attribute that the these indices are on a good run for the past decade, and are massively overvalued at this point in time, and a correction is needed in order for it to not cause yet another global economic crisis--not that it's inevitable anyway.

[clrpod]

Stock markets never react well to uncertainty, just like any markets. A government shut down and a president attacking the FED is always going to be a large contributing factor to any ongoing uncertainty.

[Netnox]

Ever since Trump became the POTUS, the Dow Jones rallied by more than 50%. We should not forget that, right?

[exstasie]

DJI, SPX, NASDAQ are going down due to the same reason why bitcoin was beeing dumped... because it was pumped like stupid just beafore. 10 years of constant grow and finally we are at a moment where "alwais growing asset" start to fall and everyone is running away because most of its holders first time seeing thing like that. Saying that it happend because trump wrote something on twitter is shittalk propaganda made by huge investors that didnt sell yet and they need demand from those "smart guys" thinking that "scared street investors are selling because of Trump tweet". Stocks are waaay away from where it should be.

The stock market went through the blow-off stage of a bull market and has been correcting accordingly, yes.

However, there's something to be said for market catalysts that can trigger sellers who were waiting for higher prices. Trump's belligerent posturing towards the FED and the rumors of his plans to fire the FED chief over the rate hike were totally unprecedented in American history. This was cartoon-level stuff that really left a black cloud of uncertainty over the markets. Markets hate uncertainty. We shouldn't be too surprised the resulting panic pushed the DJIA a couple thousand points further than it otherwise would have gone.

[1Referee]

Ever since Trump became the POTUS, the Dow Jones rallied by more than 50%. We should not forget that, right?

It's not correct to credit him for that. Sure, he may have contributed left and right, but the mega bull run started years before Trump managed to put the US to shame by becoming president. If it doesn't cost anything to borrow money, and there is more of it pretty much year after year, it won't require you to be a genius market guru to know where a lot of that capital is flowing into.

On the other hand, people are happy as long as the stock market goes up which means that no one has much to complain about, but when it starts correcting people suddenly act like it's fake, manipulated, etc. The same applies to what happened last year with crypto. No one complained on the way up and everyone had a good time, and now hell broke loose.

[kolesozw]

They always blame somebody else!
Why he don't blame directly the utter-high balloon stock on companies like Apple and Facebook? First is having only 2 real products, but the market-cap is to the sky, the Second is making money only selling data and it's into scandal over scandal.

My prediction is that 2019 will bring a lot of pain to the shareholders of Apple, Facebook and balloons like them!

[Kemarit]

Ever since Trump became the POTUS, the Dow Jones rallied by more than 50%. We should not forget that, right?

It's not correct to credit him for that. Sure, he may have contributed left and right, but the mega bull run started years before Trump managed to put the US to shame by becoming president. If it doesn't cost anything to borrow money, and there is more of it pretty much year after year, it won't require you to be a genius market guru to know where a lot of that capital is flowing into.

On the other hand, people are happy as long as the stock market goes up which means that no one has much to complain about, but when it starts correcting people suddenly act like it's fake, manipulated, etc. The same applies to what happened last year with crypto. No one complained on the way up and everyone had a good time, and now hell broke loose.

I totally agree with the bolded statement there. Funny though, even after Barack became the President I would say that the US economy is doing good so there's no one to get credit here or even get to blame, IMHO. One thing to look though is Trump's trade policy, It's very tricky and we have seen some sort of silent trade war already going on with China. So we will see how the US economy will respond to that. But I will not be surprised if Trump will blame (if the economy get worst) to the Fed or even Democrats.

[Hydrogen]

AFAIK the reason behind the decline involves CEO's and executives dumping their holdings in record numbers. Whenever there are significantly greater sellers in relation to proportion of buyers we see massive declines via fundamental market mechanics. The motive behind selling can be attributable to the federal reserve wanting to raise rates. It could be an organized attempt to pressure Donald Trump to abandon his trade and intellectual property disputes with china.

Blaming Trump for everything is too oversimplified and generalized an explanation. That answer will satisfy those who aren't knowledgeable and don't care about details. Its another indication of how journalism's standards have deteriorated over time and how the news can be an unreliable source of information.