Trump, animal spirits and a lesson from Rafa Benitez

Donald Trump continues to dominate the headlines, the latest reason being his press conference last Thursday. (See link to transcript) One thing the guy is not short on is confidence, deluded or otherwise. A month into the job he’s already talking about the “incredible progress” he has made.

“I don’t think there’s ever been a president elected who in this short period of time has done what we’ve done.”

The press conference, which is quite entertaining in a weird way, has been picked apart for a variety of reasons. However, from a market perspective what I find it unnerving is Trump’s reference to the recent stock market euphoria as a barometer for how well he is doing.

After citing his approval ratings in “a new Rasmussen poll”, Trump reminded the audience: “The stock market has hit record numbers, as you know, and there’s been a tremendous surge of optimism in the business world, which means something different than it used to. Now it means it’s good for jobs. Very different.”

By overly focusing on stoking the animal spirits in markets there is massive room for disappointment if Trump’s policies fail to materialise as expected.

On another note, all of this talk of fake news and the credibility of facts brought me back to the infamous ‘facts’ rant from Rafa Benitez – aimed at Alex Ferguson – in January 2009 when his Liverpool side were sitting top of the premier league table: “I am talking about facts I am not talking about my impression”.

Nothing good came of that rant. His rival Alex Ferguson was emboldened – Fergie didn’t even respond to it, later recounting how he felt ‘I said “well, he must be troubled”’ – and Manchester United won the league that season.

Rafa should have kept the head down and stuck to the real business. Likewise, Donald Trump would be best served by keeping his own counsel on his true feelings. Someone should remind Trump that he has already won, he is the President of the United States! The public attacks now just make him look weak and like a man who is no longer in control.