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Trump might think that a recession is a conspiracy — but investors don’t

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The Dow plunges more than 500 points in opening trade after Britons vote for Brexit (AFP Photo/Spencer Platt)

President Donald Trump thinks that any talk of a recession is a “Democrat conspiracy” or an example of the “fake news media” trying to take down his presidency.

“The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election,” Trump tweeted early in August. “The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China!”

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“The Fake News LameStream Media is doing everything possible the ‘create’ a U.S. recession, even though the numbers & facts are working totally in the opposite direction. They would be willing to hurt many people, but that doesn’t matter to them. Our Economy is sooo strong, sorry!” he also tweeted.

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Trump then bragged about what he called his stock market.

“My Stock Market gains must be judged from the day after the Election, November 9, 2016, where the Market went up big after the win, and because of the win. Had my opponent won, CRASH!” he tweeted on Sunday.

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But according to CNN Business, investors aren’t listening to Trump on economic stability. They’re listening to the experts. The reality on Wall Street has been mass sell-offs.

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“Corporate insiders have sold an average of $600 million of stock per day in August, according to TrimTabs Investment Research, which tracks stock market liquidity,” wrote reporter Matt Egan.

He explained that August is on track to be the fifth month in 2019 where insider selling is over $10 billion. The only time it has happened was in 2006 and 2007 before the stock market dropped and the U.S. saw one of the worst recessions in a generation.

“Investors often view insider buying and selling — transactions performed by top executives, leading shareholders and directors — as a signal of confidence,” wrote Egan. “Even though the stock market is much larger than it was in 2007, so the $10 billion mark may not mean as much now as it did then, the acceleration of insiders heading for the exits could indicate concern about the challenges ahead, especially as the US-China trade war threatens to set off a recession.”

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Speaking to big donors last week, Trump’s chief of staff, Mick Mulvaney, promised that if there’s a recession, it will be moderate and short. Trump, by contrast, is still saying it’s never going to happen.

“Trump advisers fear a weakened economy would hurt him with moderate Republican and independent voters who have been willing to give him a pass on some his incendiary policies and rhetoric,” reported ABC News last week. His advisers are stumped for how to stop the possible dip.

The reality is that Trump’s trade war has left the United States at a disadvantage.

“Facing a trade war against China that has shaken the global economy, President Donald Trump gathered his most trusted economic aides in the Oval Office,” the Associated Press also reported last week. “The assembled brain trust for Friday’s urgent consultations included an economics chief best known for his stint as a cable TV commentator; a trade adviser whose pro-tariff views are outside the economic mainstream; and a treasury secretary (joining by phone on his way back from vacation) who made millions off the housing crisis and then turned to financing Hollywood movies.”

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No amount of Trump’s tweeting seems to have stopped investors from protecting themselves.

Read the full CNN report.


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