What Phase One?
When the Phase One trade deal was first announced, it was October 11, I think was the date. And before that date, nobody ever heard, “Phase One”. It was always, “trade deal, trade deal”. There was never any talk of Phase One. Then all of a sudden Trump comes out and says, “We’ve completed Phase One! The Phase One deal is done. We have concluded negotiations, we have come to a deal. We have this great Phase One deal; it’s already done. It’s in the bag. We’ve agreed to it in principle, all we need is the formalities of putting it on paper. We’re going to have a big signing ceremony, and it’s all going to be done.” Oh, and by the way, Trump said, “This is the greatest deal ever for American farmers. They have never had a deal this great; go out and buy some more tractors; I don’t even know if we can fill this order, it’s so big – it’s the biggest order in the history of agriculture!” It’s a good thing farmers didn’t go out and buy new equipment based on Trump’s phony promises.
Sending the Dow Up – Buy the Rumor!
But in any event Marc Faber asked Wilbur Ross, “Do you regret this?” Do you think Trump should not have come out and said this?” And he said, “No, we don’t regret it.” Of course, why should he regret it? The Dow rose by 1600 points following that comment! That comment sparked all sorts of more comments; the deal is imminent any day, any week or they’re going to sign it here… “Buy the rumor, buy the rumor, buy the rumor!” And they pushed the market. The Dow went through 28,000 on all that B.S. So why should Wilbur Ross regret that, when the comments worked?
Bidding the Spoos Higher
I said a long, time ago: “Trump is not talking to the Chinese. He’s not negotiating, because if he was, he’s the worst negotiator ever. He ought to read, “The Art of the Deal”. What he is saying makes no sense, if you’re trying to negotiate. The only way Trump’s statements make any sense is if they’re really designed to boost the stock market. He’s not talking to the Chinese; he’s talking to the algo’s. He’s talking to the traders. He’s trying to bid the spoos higher.