To those of you who, like me, have a very low regard for Donald Trump, 2019 promises to be a year in which his mettle will be tested severely and hopefully exposed for the horror that it is.
It isn’t yet clear whether his trade war with China was one of the major contributory factors in the very poor Apple sales performance. Market saturation for their latest mobile phone hardware may be more widespread than the Chinese domestic market. But it seems that Trump’s aggressive approach to the Chinese on trade matters may also have contributed to consumer resistance in China to Apple products.
The Apple share price crash has badly rattled Wall Street. Channel-hopping over the post-Christmas break, I was struck by the willingness of noisy pundits on CNBC and Bloomberg TV to remain bullish in the face of gathering storm clouds for the world economy and the US economy.
The American obsession with the stock market is a wonder in itself. Those Americans with any savings or wealth follow the markets with the same zeal as European football fans following the Premiership. Savings in pursuit of maximum yields, in my view, career from one position to another. But the market is dominated by algorithms and trust funds and fund managers which seem wholly detached from the underlying commercial realities of enterprise and commodities.
Gambling on price movements in shares, commodities and gilts is in reality gambling rather than investment. It is more akin to a parasitic third derivative of any underlying wealth creating enterprise.
In the case of Apple, the white heat of optimism seems to have blinded investors to the likelihood that there will be market saturation in the mobile phone trade, that competitors will cut back profits, and that consumers will not always rush lemming-like for hugely expensive new models or for dubious innovation.
Despite a general consensus that the world economy is heading for a slow-down or perhaps a recession in the next 20 months, the TV market pundits keep grasping at straws to remain optimistic.
In particular, Trump is deeply scared that the Fed will raise interest rates at a time in the political cycle that could be damaging to his own prospects of re-election in 2020. For him, the idea that the Fed might let the air out of the American economy’s tyres when his whole political project is based on stimulating the economy is very, very scary.
Could he sack the Fed’s chairman, Jerome Powell, to prevent an interest rate rise? It appears that Treasury Secretary Steve Mnuchin has advised Trump that he could not do so. But it does appear that Trump raised the possibility of firing Powell.
But Trump nonetheless rattled his scabbard in the hope that the Fed will back off interest rate rises while Trump is engaged in “trade negotiations” with China. So delicate are the markets right now that the Fed may yet actually consider a cut in interest rates rather than implement its prior intentions to raise rates in a number of stages later this year.
Trump simply cannot afford any stall in the markets while he is confronting the Chinese. He has to create the illusion that any adverse consequences of his trade war with China are not his responsibility.
Trump is engaging in a high-wire juggling act. He is running a massive trillion dollar deficit. This is the man who pledged himself to eliminating the deficit over a number of years if elected president. He is spooking the international markets with his trade war tactics. He needs the bull market in US shares (which he inherited) to resume and to continue until November 2020.
Now that he has lost control of one House of Congress to the Democrats, Trump’s political options are tightening. The position of confrontation that he has adopted over the Wall and his decision to shut down large swathes of government unless both houses legislate for $5.6 billion to build his wall could well back-fire.
Unless he can persuade the majority in the US that his demand for a $5.6 billion “Wall Budget” is legitimate, he risks being seen as a reckless gambler.
While Trump may claim that he sought and obtained an electoral mandate to build the Wall, he only did so on the preposterous basis that the Mexicans would pay for it – not the American taxpayers. He has absolutely no mandate to build it by increasing the federal deficit.
In the meantime, taking ordinary Joe federal public servants as political hostages is despicable.
I wrote here before Christmas about the need for the Democrats to find a good candidate to take him on in 2020.
It was a little disheartening then to see Elizabeth Warren, Joe Biden and John Kerry setting about testing the waters. Even Michael Bloomberg was speculating about having a canter himself.
For my money, the Democrats need a new face on the posters.
Beto O’Rourke is the kind of candidate they need. Looking at the hugely diverse group of congressmen and congresswomen who voted Nancy Pelosi into the speakership position this week, there is a danger that the Democrats will lean too far to the left in finding a new face to challenge Trump.
To win the 2020 election, the Democrats need a candidate who will appeal to the soft Trump vote, particularly in the rust belt and mid-west states. They need to avoid the trap of pitching another Sanders or Dukakis candidate. The centre ground is where the battle will be fought and hopefully won.
Internationally, the wheels are already falling off the Trump wagon. What has he to show for his North Korean sabre rattling? Where is the way out for Trump in Afghanistan, Syria and Iraq? What chance has the appalling Jared Kushner – Crown Prince Mohammed Bin Salman’s best friend – of making any headway in the Middle East? What chance has Trump of bringing Tehran to its knees?
Just watch now as the Crown Prince beheads some of the people he sent to Istanbul to murder Jamal Khassoghi – all after a fair trial in Saudi terms. Although the 11 accused have not yet been named, the prosecutors have indicated that they will be seeking the beheading of 5 of them.
There is only one man in the world who does not blame the Saudi Crown Prince for that heinous crime. His name is Donal Trump - and he could only bring himself to condemn the quality of the “worst ever” Saudi cover-up.
There is reason to hope that Trump’s term – already halfway through – will end after four years - and that US voters will bring back sanity, strength and order to the affairs of their nation.
The real risk for Ireland is that Trump will bring the roof in with him as he politically implodes – in the sense of precipitating a world crisis that would threaten our fragile recovery.
We should be praying that Trump’s presidency ends with a slow puncture rather than a blow-out.
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