Donald Trump is morphing and the markets are relishing OpEds / Politics and Prose

The recently-departed (Dec. 7) multi-talented master musician, Greg Lake (c’est la vie, Greg), was known for many things, primarily his work with the progressive rock group Emerson, Lake and Palmer. Lessor known is his role in an earlier band, King Crimson, and his singing of a significant song in rock history, 21st Century Schizoid Man. Weirdly, some of those early lyrics serve as a particularly poignant parallel to what we are seeing today with the President-Elect. Is Donald Trump our own 21st Century Schizoid Man?

Some of us were especially concerned about the more outlandish statements and policy positions of Mr. Trump’s scorched-earth campaign. These included, but were not limited to, bailing from the North Atlantic Treaty Organization, a call for killing the families of terrorists, getting rid of gun-free school zones, his seemingly hell-bent stance that climate change is a hoax, prosecuting his opponent (Secretary Hillary Clinton), deporting millions of immigrants and banning entrance to the United States based upon a religion. However, what we’ve witnessed since the election has been nothing short of a monumental metamorphosis.

Many of the statements and positions noted have already been modified or abandoned. To some extent, I’m reluctant to raise such because it’s a good thing that he has done so. More importantly, perhaps, the erratic campaigner identity has seemingly morphed materially into a serious, sanguine and self-assured President-Elect. Save some offbeat Tweets, he’s exhibited grace, competence and confidence. In the process of this evolution, he’s bizarrely bought more credibility—even support—from some of his detractors.

Not many years ago, changing positions on a policy issue was considered political suicide. I worked for a Congressman who switched his vote based upon a substance evolution of views. His name was “Floyd” and negative campaign ads labelled him “Flip Flop Floyd”. The moment the first commercial aired, the election was over. Similarly, in 2004 Senator John Kerry (now our Secretary of State) was attacked by then-President George W. Bush in the presidential contest with a hard-hitting commercial noting Kerry’s vote for the Iraq War before he voted against it. The ad used footage of a windsurfing Kerry with the tag line: “John Kerry: Whichever way the wind blows”. Of course, President Bush won reelection.

With Mr. Trump, however, he’s had numerous policy positions (including the Iraq War and abortion—not minor matters) on which he flipped stances during the campaign. That didn’t seem to hurt him in the least. And now, yet again, we see him shifting positions as President-Elect.

In 21st Century Schizoid Man, there’s a line: “Politicians’ funeral pyre.” When the song was written, changing positions—being a schizoid—would be a deathly detriment for a pol. But, that’s not what we’ve been seeing with our President-Elect. His reversals, renovations and conversions—at least to date—hasn’t resulted in any dark or dismal political prognosis. In fact, a new Bloomberg poll (conducted Dec. 2-5) notes that 55 percent of people are more optimistic about Mr. Trump’s presidency based upon his actions and statements since the election. That’s significant given he actually lost the popular vote (by 2 million) and according to ranks as one of the closest wins in electoral college history (306-232).

Similarly, global financial markets have relished in the Trump metamorphosis. From financial futures in Chicago to myriad stock markets in Japan, Europe and around the globe, high frequency traders and other market makers have made some of the deepest, most liquid markets ever. Trading volume reached a record high (Nov. 30) on energy commodities at the New York Mercantile Exchange where more than 4.5 million contracts traded in a single day. Robust and roaring markets continued in recent days as major Wall Street indexes have boomed to unprecedented highs.

To a certain extent, all of this—this tremendous transformation and reaction to it—seems sorta surreal. One of Greg Lake’s signature tunes, one he wrote as a child with his first guitar, is Lucky Man. In thinking about what has transpired this year, it’s easy to acknowledge Mr. Trump’s significant skill as not only a capable and calculating campaigner, but a changed and charged-up President-Elect. More power to him. That said, it’s also fair in thinking about Mr. Trump by quoting Mr. Lake, “Ooh, what a lucky man he was”… and continues to be.

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