December 26, 2018

After the stock market plunged to its worst Christmas Eve drop ever, Fox News anchor Leland Vittert ripped the Trump administration reactions that accelerated the declines: “Nothing says confidence from the administration like the treasury secretary, over the Christmas holiday, calling – quoting now – “the plunge protection team” of the six big banks.”

Subbing for Shepard Smith this Monday, Vittert asked Wall Street Journal columnist Aaron Back, “Do you understand what they were thinking? Is this misreporting? The markets really did not appreciate that.”

Vittert was referring to tweets from Donald Trump and Treasury Secretary Steve Mnuchin that served to inflame the situation. Vanity Fair’s Bess Levin summed up the Mnuchin tweet thusly:

The Treasury Secretary, who’s been described by various former Goldman Sachs colleagues as unmemorable and not as smart as Gary Cohn, and by a former White House staffer as “a political novice who doesn’t have the substantive background to do the job he’s being asked to do,” decided that with the markets in free-fall, it was his duty to call up the nation‘s six largest banks and yell “Don’t panic!” into the phone. Then, he decided to tell the world about the contents of those phone calls via Twitter, letting everyone know they can breathe easy about a problem no one was worried about until Mnuchin brought it up

“I don’t understand what the secretary was thinking,” Back told the Fox viewers. “No one was worried about the soundness of the banks in the current situation. No one was saying that the banks lack liquidity at the moment. … As I said in my column today, he was reassuring people about things that no one had thought to worry about yet.”

Vittert chuckled. “And now suddenly, they said, “Well, gee, maybe we need to worry about them.'"

“It was very unhelpful today and I think we saw that in how the market performed this Christmas Eve,” Back agreed.

Then Vittert brought up Trump’s “tweetstorm” in which he attacked Fed chairman Jay Powell, who raised interest rates last week. Trump's tweet likened the Fed to “a powerful golfer who can’t score because he has no touch – he can’t putt!”

“That really sort of sent things down even farther,” Vittert correctly noted. He took another dig at Trump, adding, “If you know anything about President Trump’s golf game, there’s some irony there. But any idea what that really means?”

Back had no idea but he said that if the Fed is a golfer trying to putt, “Trump is sort of their buddy in the background loudly giving them advice while they’re trying to concentrate. All this noise he’s making about the Fed is not helping anything.”

If anything, Back said, Trump’s attacks will make it more likely the Fed continues to raise interest rates “because they want to appear independent and they don’t want to appear that they’re buckling to political pressure from the president.”

Despite all this, Back urged investors to stay “calm” and “rational” and “maybe even look for some bargains out there in the market.”

And that may well be good advice. But when you have the treasury secretary unnerving the market and Trump’s tweet exacerbating the plunge, it seems the “rational” thing to do is to worry about the competence of the folks at the helm.

Watch the derision of Trump above, from the December 24, 2018 Shepard Smith Reporting.

Crossposted at News Hounds.
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