Trump’s Ability to Fail Forward Fast Could be a Positive for Markets

Let’s face it, the events in Washington the past 48 hours were just plan boring. I’m not a political guy, I’m a trader. I’m not in the game for the juice or the rush, but to make a living. After hoping for something to develop early in the sessions on Thursday and Friday so I could take advantage of the expected volatility in the financial markets, I was largely disappointed by the whole process. However, I took one for the team and decided to stick it out until the end. This meant sitting in front of a box with a television on in the background, literally watching nothing.

Once I saw the early news that Speaker Paul Ryan had told President Trump that he didn’t have the votes, I knew this day would turn into a waste of time because that’s what the political system in the U.S. has turned into for the professional trader/investor.

Once I saw that the vote would take place at 1930 GMT, I knew that professional investors or even human traders wouldn’t react to any news with only 30 minutes to go before the week-end. Smart money stayed out of the market during that last half an hour of trading and unless you were trying to break even for the week like a gambler putting a bet on Monday night football after losing money on Sunday, there was absolutely no reason to trade the story, or non-story.

Personally, I’m not sure that anyone really knew what a yes or no vote would mean. Some overseas friends thought the U.S. was voting for health insurance and that a “no” vote would mean I would wake up without insurance on Saturday morning.

Some investors thought a “no” vote would mean that President Trump was losing his touch at persuading people to buy into what he was selling. Or to play on the title of one of his books, he was going to lose at the “Art of the Deal”.

I became further confused after I saw that Trump said on Thursday night that if we lose the vote, we’ll just move on to tax reform anyway.

So what do I think is going to happen come Monday morning? I’m not even going to guess, but I will be watching the Treasury Bond market. T-Bond traders are the smartest guys on the planet and their actions will tell me if the postponement of the vote was good or bad for the economy.

I do like the fact that Trump is moving on quickly because like a good trader, you have to be willing to “fail forward fast”. It makes no sense to dwell on what went wrong, just move down the checklist and start working on something new.

That being said, I do believe that if investors take away one positive from Friday’s events and that positive is that Trump is still trying to move forward after defeat then I think that will go a long way in terms of determining what kind of President he is going to be when his four years are up.