Trump: "The Country Is Headed For A Massive Recession; It's A Terrible Time To Invest In Stocks"

Tyler Durden's picture

Donald Trump continued to streamroll over all conventional narratives when during a massive 96-minute interview with the Washington Post on Thursday which was released today, in which he talked candidly about his aggressive style of campaigning and offered new details about what he would do as president, he said that economic conditions are so perilous that the country is headed for a "very massive recession" and that "it’s a terrible time right now" to invest in the stock market, which, the traditionally cheerful WaPo said embraces "a distinctly gloomy view of the economy that counters mainstream economic forecasts."

Unfortunately, his "gloomy view" is supported by such events as the record surge in gun violence and deadly shootings in Chicago, where the locals also do not ascribe to the WaPo's rosy take on events, and instead blame the economy and the lack of jobs for the ongoing social collapse in the windy city. 

In any case, Trump dismissed concern that his comments, which the WaPo said "are exceedingly unusual, if not unprecedented, for a major party front-runner", which is precisely Trump's style, "could potentially affect financial markets."

As the WaPo adds, "over the course of the discussion, the candidate made clear that he would govern in the same nontraditional way that he has campaigned, tossing aside decades of American policy and custom in favor of a new, Trumpian approach to the world."

In his first 100 days, Trump said, he would cut taxes, “renegotiate trade deals and renegotiate military deals,” including altering the U.S. role in the North Atlantic Treaty Organization.

This is what he said:

"I think we’re sitting on an economic bubble. A financial bubble... We’re not at 5 percent unemployment. We’re at a number that’s probably into the 20s if you look at the real number. That was a number that was devised, statistically devised to make politicians – and in particular presidents – look good. And I wouldn’t be getting the kind of massive crowds that I’m getting if the number was a real number."

 

"I’m talking about a bubble where you go into a very massive recession. Hopefully not worse than that, but a very massive recession. Look, we have money that’s so cheap right now. And if I want to borrow money, I can borrow all the money I want. But I’m rich... If somebody is a great, wonderful person, going to employ lots of people, a really talented businessperson, wants to borrow money, but they’re not rich? They have no chance...

 

Is it a good time to invest now? "Oh, I think it’s a terrible time right now... because the dollar's so strong... You have – think of it – you have cheap money that nobody can get unless you’re rich. You have the regulators are running the banks. Not the guys that are being paid $50 million a year to run the banks. I mean, when you look at many of your friends that are running banks that are being paid $40 and $50 million, yeah, they’re not running the banks. The regulators are running the banks. You have a situation where you have an inflated stock market. It started to deflate, but then it went back up again. Usually that’s a bad sign. That’s a sign of things to come."

 

"Part of the reason it’s precarious is because we are being ripped so badly by other countries. We are being ripped so badly by China. It just never ends. Nobody’s ever going to stop it. And the reason they’re not going to stop it is one of two. They’re either living in a world of the make-believe, or they’re totally controlled by their lobbyists and their special interests. Meaning people that want it to continue. Because what China, what Mexico, what Japan – I don’t want to name too many countries, because I actually do business in a lot of these countries – but what these countries are doing to us is unbelievable. They are draining our jobs. They are draining our money."

 

"I can fix it. I can fix it pretty quickly...I would do a tax cut. You have to do a tax cut. Because we’re the highest-taxed nation in the world. But I would start...I would immediately start renegotiating our trade deals with Mexico, China, Japan and all of these countries that are just absolutely destroying us. "

Below are some of the annotated highlights of his bearish take on the economy via the WaPo.

Trump has for months contended that the U.S. economy is in trouble because of what he sees as an overvalued stock market, but his view has grown more pessimistic of late and he is now bearish on investing, to the point of warning Americans against doing so.

 

“I think we’re sitting on an economic bubble. A financial bubble,” Trump said. He made clear that he was not specifying a sector of the economy but the economy at large and asserted that more bullish forecasts were based on skewed employment numbers and an inflated stock market.

 

"First of all, we’re not at 5 percent unemployment. We’re at a number that’s probably into the twenties if you look at the real number,” Trump said. “That was a number that was devised, statistically devised to make politicians — and, in particular, presidents — look good. And I wouldn’t be getting the kind of massive crowds that I’m getting if the number was a real number.”

 

Trump said, “it’s precarious times. Part of the reason it’s precarious is because we are being ripped so badly by other countries. We are being ripped so badly by China. It just never ends. Nobody’s ever going to stop it. And the reason they’re not going to stop it is one of two. They’re either living in a world of the make-believe, or they’re totally controlled by their lobbyists and their special interests.”

 

“I’m pessimistic,” Trump said. “Unless changes are made. Changes could be made.” By Trump, for instance: “I can fix it. I can fix it pretty quickly.” Trump firmly believes that a turnaround on trade would be the necessary beginning of a solution to any looming recession.

 

He mentions the Trans-Pacific Partnership as one pact he would immediately seek to renegotiate, putting him at odds with congressional Republicans who supported giving the president fast-track trade authority last year.

 

Coupled with his push on trade would be a “very big tax cut,” which Trump unveiled last September. That proposal increases taxes on the “very rich” but reduces taxes for most taxpayers and would cut the corporate tax rate to 15 percent. To woo companies back to the United States, he would offer an incentive of a deeply discounted rate and would no longer allow corporations to defer taxes on income earned overseas.

* * *

The Washington Post was displeased by Trump’s pessimistic view, which it said "runs counter to that of most economists, whose rough consensus is that the U.S. economy has about a 20 percent chance of slipping into recession this year largely because growth remains weak across the world, according to a Wall Street Journal survey of economists in March."

Most economists aren’t overly worried about an imminent downturn because job creation remains strong, workers are starting to see their wages grow and the Federal Reserve remains cautious about shifting away from the low-interest-rate stance that has helped stimulate the economy.

Cheerful economists promptly chimed in to defend the economy:

 

Of course, whether Trump is right or not with his warning about the economy and the market, only time will tell, although as we reported in mid-January, Trump is certainly hoping for a market crash. The reason is that historically, the market performance in the three months leading up to a Presidential Election has displayed an uncanny ability to forecast who will win the White House… the incumbent party or the challenger. Since 1928, there have been 22 Presidential Elections. In 14 of them, the S&P 500 climbed during the three months preceding election day. The incumbent President or party won in 12 of those 14 instances. However, in 7 of the 8 elections where the S&P 500 fell over that three month period, the incumbent party lost.

In other words, if Trump wants to win he would certainly benefit from a major drop in the S&P in the all important September to November period. That is, assuming he gets the nomination.

* * *

Of note also was Trump's insistence that he would be able to get rid of the nation’s more than $19 trillion national debt: "We’re not a rich country. We’re a debtor nation. We’ve got to get rid of – I talked about bubble. We’ve got to get rid of the $19 trillion in debt." How long would that take? "Well, I would say over a period of eight years."

This is how he says he would do it: "I’m renegotiating all of our deals, the big trade deals that we’re doing so badly on. With China, $505 billion this year in trade.” He said that economic growth he foresees as a consequence of renegotiated deals would enable the United States to pay down the debt.

But Trump's most interesting comment had nothing to do with economics - it was his admission that everyone close to him — family, friends, Republican leaders — have been urging him to tone down his attacks and reach out to former rivals, both to reassure wary voters and to begin the difficult process of unifying a party in which many have sworn to never back him. Trump does not intend to take the advice. He said such overtures are "overrated." "I think the first thing I have to do is win," he said. "Winning solves a lot of problems. And I have two people left": his two remaining Republican rivals, Sen. Ted Cruz of Texas and Ohio Gov. John Kasich.

Bob Woodward summarizes his take of the Trump interview

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souljaboy's picture

Worked for Bill Clinton in 1992.

38BWD22's picture

 

 

The Bubble will end sometime.  Probably sooner rather than later.

Maybe Trump is laying down markers....

 

EDIT: Trump took 3 kg of gold for first month's rent from apmex when they had their offices in NYC (apmex is no longer there).  

"Trump took gold" being the key words there...

http://cdn2.newsok.biz/cache/w320-222ff0106050de127be0a98339d6b442.jpg

MFL8240's picture

Trump is 1000% right.

Casanova's picture
Casanova (not verified) MFL8240 Apr 2, 2016 9:51 PM

The country IS HEADED??? It's already THERE and more - in a DEPRESSION. And this is why >>> http://wp.me/p4OZ4v-3z

macholatte's picture

Lyin Ted Cruz goes FULL Establishment Retard

Cruz named Former Texas Senator Phil Gramm as his economic guru.

Ted Cruz And The Wall Street Connection
http://dailycaller.com/2016/04/01/ted-cruz-and-the-wall-street-connection/

Escrava Isaura's picture

 

 

Phil Gramm?

I need a drink. Actually, double it.

weburke's picture

stocks are going up.

consider cvs, future of medicine, go to pharmacy, get a staff person who looks up your symptoms on the computer, precribes the meds, sends you 30 feet away to buy them. And they are due to split after more of a rise. 

38BWD22's picture

 

 

Good eye, Cheap!  Nice story.  About time the Europeans got a start on something sensible.

BaBaBouy's picture

USA 20% + UI... Yes Donald you said it... Answer: DEVALUE The USD against other paper Fiats.

And all Fiats DEVALUED Against GOLD & SILVER Real Money...

This will provide liquidity and Kick start the Global economies...

BaBaBouy's picture

Trump has already comented that he doesn't beleive the GOLD is there in FT Knox...
The MSM sure dropped this headline REAL FAST...

Never One Roach's picture

As long as the people hold gold they are ok, and in their physical possession in one way or another so financial crooks like Corzine don't grab it.

 

The Canadians and Australians who invested 40% of their extra money into solid gold ---bars, coins, whatever--- are sitting pretty as they watched their currencies plunge 40% over the past year while gold held solid,

 

They will feel doubly good when their overpriced houses sink 40% also while their gold shines and is aan excellent store of value.

Surviver22's picture
Surviver22 (not verified) Never One Roach Apr 3, 2016 7:56 AM

Has Trump gone too far? The shocking statement you won’t see on the news...

http://tinyurl.com/jms8385

SoilMyselfRotten's picture

Not sure that was wise by Trunp. If the market crashes Monday they will try to pin this one squarely on him for these comments. They will find somethiing to derail him so if the timing suits them to tank things...

Shocker's picture

At least someone is talking about the current economic situation.

Layoff List: http:/www.dailyjobcuts.com

-

McCormick No. 9's picture

Trump is right! I wonder what Trump's Zerohedge avatar is...

Kayman's picture

 

Survivor 22

Trolling for Moveon. 24 weeks. 

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) weburke Apr 2, 2016 11:10 PM

OK, liking Trump more and more.

greenskeeper carl's picture

Ya, but someone needs to explain to him how a debt based monetary system works. Since each new unit of currency created is loaned into existence, it is impossible to pay off all debt. Without debt, there'd be no money.

He'd also do better if he talked about our true debt, north of 200 trillion in unfunded liabilities. Even if we magically got rid of our 19 T current debt, that wouldn't make a difference in the long run, it would just kick the can a little further than usual.

tenpanhandle's picture

Gol-darnit Carl!  What's reality got to do with it.

Zero Point's picture

Telling people that either they, or their grandkids will have to grow a garden to survive, isn't much of an election platform.

Eyeroller's picture

"Telling people that either they, or their grandkids will have to grow a garden to survive, isn't much of an election platform."

The truth doesn't work for politicians.

Never One Roach's picture

I listened to Trump last night when he spoke in Wisconsin. Makes 100% perfect common sense. Why not stop wasting Billions on [outdated] NATO and the UN and use that money for construction and engineering jobs to rebuild the shitty roads, airports, etc we have in America?

 

Replace Obamacare with a real health care plan that American are NOT FORCED to accept and have an option. Even Trump said Obamacare premiums and deductibles are outrageous.

Bring jobs back and/or don't let them leave by offering incetives or taxing their imports from their foreign source. Pfizer alone took 6,0000 jobs to Ireland under Obama.

The list job losses goes on, and on under Obama.

If you are a FSA and want to stay FSA then Hillery or Sanders are for yuo.

If you are in the other group paying for the FSA, then Trump is your Man!

Common sense.

McCormick No. 9's picture

Trump is sounding like Ron Paul after Ron Paul made a billion dollars.

HardlyZero's picture

Change isn't enough.

Transition is not correct since it means getting through the mire.

Pivot is not active enough.

Transcend has the right Reset dynamic.

Some how Trump will have to transcend this to get to the other side of Reset, and let the (house of) cards land where and when they fall.

WOAR's picture

But that's why debts are never paid.

They're renegotiated.

"Oh, I owe you 20 TRILLION dollars? Nah, I'll keep 15T's, and we'll set the interest rate at X%. In exchange, blabbity blah, blabbity blah, blabbity blah..."

That. Happens. Constantly. Just think of how home refinancing works...

dognamedabu's picture

If all debt was paid off you'd be correct but I think he is talking about government debt. As far as the unfunded liabilities...Time for ppl to realize they aren't getting jack when they retire.

DieselChadron's picture

He knows how the monetary system works - probably better than any of us.

Consider this interview the tell tale sign this Trump guy is just a different kind of puppet.

Tell tale sign #2- compare Trump's media exposure to Dr Paul's in 2012.  

 

JonNadler's picture

did he actually say

 

You have the regulators are running the banks. Not the guys that are being paid $50 million a year to run the banks. I mean, when you look at many of your friends that are running banks that are being paid $40 and $50 million, yeah, they’re not running the banks. The regulators are running the banks

 

???????????????????

Freddie's picture

The GOP-e Cruz-Bush-Romney are pulling out all the stops to steal it.  Romney has the Mormon vote theft going in Colorado this weekend.  Sickening.

You have Repubilican voters for Canadian Cruz-Bush cheering the theft on.  Sickening.

algol_dog's picture

Does anyone doubt what Yellen's sudden turn around on rates was really about. If you think it was emerging markets I got a bridge for you. That chart of above of the stock market predicting the presidential election says it all, and it is what Yellen and Co. are vigorously fighting against, namely Trump possibly riding in on the back of a recession.To be sure, the spigots will be wide open and full throttle until this election is over. Self preservation is the FED's motivation. They're not about to risk a Trump, or Bernie victory.

McCormick No. 9's picture

You're right- the PPT just aded a new task- President Protection Team.

Whalley World's picture

When I read the overview I laughed so hard I was crying.
An actual politician saying 20% unemployment and toppy market is so bizarre it actually surreal

38BWD22's picture

 

 

Who said this?

“PICTURE THE PRINCE, SUCH AS MOST OF THEM ARE TODAY: A MAN IGNORANT OF THE LAW, A VIRTUAL ENEMY TO HIS PEOPLE'S WELFARE, SOLELY FOCUSED ON HIS PERSONAL CONVENIENCE, A DEDICATED VOLUPTUARY, A HATER OF LEARNING, FREEDOM AND TRUTH, WITHOUT A THOUGHT FOR THE INTERESTS OF HIS COUNTRY, AND MEASURING EVERYTHING IN TERMS OF HIS OWN PROFIT AND DESIRES."

Try to guess (to yourself), the answer will surprise you.

http://jessescrossroadscafe.blogspot.com/

I am really liking Jesse's site more and more.

surf0766's picture

Did you cry your daily tears for Supreme Leader Trump?

Kayman's picture

surfO766

So wash off that bright yellow streak firmly affixed to your spine and let us in on who you think would make a good President for these times.

More of the same ?  Another skanky politician ? Let's hear from you. Summon up a little courage now, come on.

K

philipat's picture

I think he has recognised that "They" are determined to prop it all up until Obumboy is out, then it will all collapse on Trump and he will be blamed because of the "uncertainty" he brought. So he is laying the story in advance that he can point to and say "I told you so", this is all an Obumboy created problem. Which, of course, it is....

Handful of Dust's picture

Bill Gross and El Erian also said similar as The Trumpmeister last week; not a good time to be in stawks 'cause we are headed for a doozie Recession.

 

Doozie Recession = Depression in layman's terms

HardlyZero's picture

correction, recession, depression are all yesterday concepts.

We need a Reset, or Default, or Bankruptcy to clear the excessive debts and promises to pay.

The benefits payout and FSA are finally running the USS America ashore or full-stop !  The ship is tilting as everyone scrambles for the best seats on the deck.

Its either full-stop or running to ground.

Doldrums or Tilt !

Fred Hayek's picture

TPTB certainly have that motivation.

However, they also have a motivation directly counter to that. If a collapse takes place while Puppet Barry the Cipher who just wants to play golf and watch ESPN is the official office holder then they can shape the initial response to the collapse to be whatever they want.

If it happens after their little puppet Barry O has gone off to be ignored on golf courses for the rest of his life then shaping the response becomes much harder.

If you were, oh let's say, the head of a bank that runs a legally permitted cartel that controls the U.S. currency wouldn't you feel at least some motivation to have the little puppet Barry O be officially in charge when a collapse happens? You got your TARP money with the little puppet in charge would you be able to steamroll Trump so easily?

There are motivations in both directions.

Escrava Isaura's picture

 

 

philipat, all collapse on Trump and he will be blamed. So he is laying the story in advance…..

 

Wishful thinking in his and your part. Saying that the country will collapse in a recession doesn’t say much. I understand that many here want to see the SHTF so they can pull their guns and take charge. In Trump case, help him getting elected. Hold your horses, cowboys. US has the most powerful military and lots of well armed cops. Anyway, we’re a long way for that. Also, many other nations will go down before the US.  

Trump won’t be the next President not because the economy is not as bad as he wishes, but, because Trump can’t get most of the undecided voters. Also, Trump will need over 45% of the women votes to win in a general election. It won’t happen. Trump won’t get 30%.

https://en.wikipedia.org/wiki/Voting_gender_gap#Recent_history

artichoke's picture

I can't imagine that Trump will have a real problem with women.  For one thing lots of women love him.  Handsome, successful, powerful, still has the little-boy spark in him.  And lots of women hate Hillary esp. the millennials -- the most vile comments against Hillary are from young women.  It doesn't make sense that he has 70% negative with women and I really wonder how those surveys are taken.

kareninca's picture

Um, Trump is not handsome.  Yes, he is successful and powerful, and his wives are beautiful.  But he is not handsome.

(LOL.  I guess some ZH dudes think he's handsome.  I'm guessing that that is not the best measure of "handsome.")

 

MsCreant's picture

Mark me down as well. He is not handsome. He is obnoxious, your weird dad.

I admit I am liking a lot of what I am hearing out of him.

I am worried I want a hero too badly. Also if the race shit blows up, well, you get the idea, he can't do squat even if he is genuine. Which I am afraid he might be. Shit. I don't like him. What fucktardery.

While I did not vote for Obama, I did secretly hope it would work out. Damn, got burned on that shit. SSDD.

Griffin's picture

I dont see why it matters if he is handsome or not. None of the 3 people that have a chance of getting this job are good looking.

In my view, Trump, Sanders and Hillary would be unlikely to last more than one term in office. So it is a question of what kind of fututre people would want after this period.

I would want to see a realistic system that defends the interests of the country and always favours the state over all other parties, regardless of who they are.

This is something the establishment is not interested in.

I think that in the next few years there are going to be considerable changes in US politics, like in the rest of the world, where the trend will be to get the public more aware and involved in politics and creating plans and ideas for the future.

kareninca's picture

Of course it doesn't matter if he is handsome or not.  It was just bizarre that someone asserted he is handsome (as a selling point), when he is really pretty homely.

Kayman's picture

When my wife calls me handsome, I tell her I am rugged.

Looks are entirely in the eye of the beholder.

Who are the alternatives to Trump and why ?  He is not bound up in the "that of which we cannot speak" chains. He has a platform if you want to read it. Everyone else is on the take. So- more of the same it is then ?

ps MsCreant.  That was some fancy poem the other day. Reminds me of Corkboot Annie (Caulkboot), an old cook in a camp where I worked many years ago. 

She would wake everyone up:

"Hands off your c--ks, Pull up your socks, it's daylight in the swamps, It's time to log, not f--k the dog, now get out of bed you c--ts." Red faces all around.

Love and kisses

K

Golden Phoenix's picture

Learn the difference between fact and opinion moron.