One day after investing legend Stanley Druckenmiller slammed the stock market, saying "the risk-reward for equity is maybe as bad as I've seen it in my career," warned the Fed will not be able to reverse the economic fallout from the coronavirus, lashed out at the US response to the pandemic and warned a corona vaccine would have little impact on individual behavior ("I don't see why anybody would change their behavior because there's a viral drug out there"), and was generally apocalyptic saying "there's a good chance that we just cracked the credit bubble that's the result of free money", none other than President Trump put Druck (and other "rich" skeptics) in his sights, when moments ago he slammed "rich guys" for speaking negatively about the market, saying that "some are betting big against it" then "they go positive, get big publicity, and make it going up. They get you both ways."
When the so-called “rich guys” speak negatively about the market, you must always remember that some are betting big against it, and make a lot of money if it goes down. Then they go positive, get big publicity, and make it going up. They get you both ways. Barely legal?— Donald J. Trump (@realDonaldTrump) May 13, 2020
CNBC's permabullish teleevangelist, Jim Cramer, a "rich guy" himself, quickly chimed in:
It's true. The rich guys are not on to help you, they are on to help themselves. There are so many great American companies that people can invest in that are doing so much for shareholders AND those on the front line..Stop scaring people! https://t.co/KHdqEANePh— Jim Cramer (@jimcramer) May 13, 2020
Oddly, there was no mention of the "barely legal" purchasing of corporate bonds by the Fed, or that other "rich guys" talk up the market every day when it hits all time highs (after calling it a massive bubble before said "rich guys" became president), then keep silent when stocks crash, only to make a repeat appearance after the Fed and Treasury doom future generations by flooding the US economy with debt, just so even more "rich guys" can become richer than ever here and now.
We are of course talking about Trump, who now fully "owns" the stock market, in conjunction with both the Fed and Treasury which are now joined at the hip to shower the economy with helicopter money, and has gone "all in" on a bet that stocks can keep rising despite the ongoing devastation of the economy, even if it eventually means the destruction of the dollar.
Meanwhile, nobody has any clue what happens in one week, let alone a few months from today, when a second coronavirus wave is expected to hit the global economy, as is already happening in South Korea, Germany and China.
What's worse, or is at least extremely myopic and ironic, is that what the Fed is doing is precisely to making "rich guys" even richer...
... while handing out scraps to those who really need the money, like the 33.4 million unemployed, none of whom enjoy the benefits of the 30% bear market rally from the March 23 lows. Furthermore, Trump's insistence on negative rates will further crush American savers who will have to pay their bank to hold their savings (assuming anyone will ever save again), while providing a "gift" to "rich guy" real-estate developers who are drowning in debt.
So is Trump's "all in" gamble on rising stocks, coupled with his slamming and shaming of skeptics, wise?
We will find out on November 3.