Make America Gyrate Again

Katie Martin (0:10)

Hola, buenos días, bienvenido al podcast Unhedged del Financial Times y Pushkin en Madrid. Applause Regular listeners will note that this sounds different to how the usual Unhedged podcast sounds. I am still Katie Martin, and I'm joined as so often by Rob Armstrong, who's flown in all the way from New York City, from the Unhedged newsletter to do this podcast today. Rob, say hola.

Rob Armstrong (0:40)

Hola.

Katie Martin (0:42)

So we've been let out of our office for good behaviour. I've escaped from the grey audio studio in the basement of FT Towers and travelled to Madrid to record this podcast in front of students, lecturers, a whole bunch of people at the IE Business School in the capital of beautiful Spain. And we can see out the window, it's a beautiful place to be. And we're really, really happy to be here. So why are we in Madrid? It's really very simple. These people asked us nicely and we said yes. There's really nothing, there's nothing more to it than that. But I will say, we thought to ourselves, Madrid, you say, in March, yes.

Rob Armstrong (1:23)

Blazing sunshine.

Katie Martin (1:25)

I packed my gaffas, my sunglasses. I'm wearing canvas shoes. And listeners, I must tell you, it is pouring with rain, like not precisely now, but the weather is terrible.

Rob Armstrong (1:36)

Yeah, terrible.

Katie Martin (1:37)

I feel like we've been...

Rob Armstrong (1:38)

It's British weather in Madrid.

Katie Martin (1:40)

Yeah. I feel like we've been brought here on...

Rob Armstrong (1:42)

You bring it with you. You do it.

Katie Martin (1:43)

On pretenses.

Rob Armstrong (1:44)

We blame you, Katie.

Katie Martin (1:45)

Yeah. So Barney Jobson from the FT's Man in Madrid, he wrote a big piece recently in the FT about how Madrid is a big destination for Americans who are fleeing the chaos of Trump's America.

Rob Armstrong (2:01)

That was true yesterday. We had a real Trump day yesterday.

Katie Martin (2:04)

But my question to you, Rob, is how big of a suitcase have you brought? Are you staying here now?

Rob Armstrong (2:11)

I have my passport in my pocket, and I'm ready to do a runner at any time. I think Monday's market was a good metaphor for how it feels to be an American right now.

Katie Martin (2:24)

Yeah.

Rob Armstrong (2:25)

Which is down violently, but sometimes up violently, sometimes sideways, up in surprising places. Yeah. So trying to figure out, this is an employment plan for financial journalists this last month or so.

Katie Martin (2:45)

The chaos of the Trump administration is precisely what keeps financial journalism alive. So thank you, Donald Trump, for that. But so, that's what we're going to talk about today, is like markets, US markets are all over the place. And we were told a couple of things at the start of this year. One of them is the only investment theme that matters is American exceptionalism. Buy US, don't buy anything else. You'd be an idiot if you bought anything else. That is working out extremely badly at the start of this year. But also we were told, and in fact we said it on this very podcast, that if markets go bad, Donald Trump will backtrack and not carry out some of the many threats that he's making. So everyone got this wrong.

Rob Armstrong (3:30)

Yes. Well, what we know is they say they won't backtrack. So you want to understand why markets were so extraordinarily horrific. Yesterday, you have to look at the comments from Scott Bessent, the Treasury Secretary and Donald Trump over the weekend. Donald Trump says, I'm not even watching markets. Scott Bessent says, we care about Main Street, not Wall Street. And then they go on to say the equivalent of no pain, no gain. You know, it's like when your doctor says to you, you might feel a little bit of pressure here.

Katie Martin (4:05)

Yeah.

Rob Armstrong (4:06)

Which means something awful is about to happen to you. And on Monday, I think the market tried to digest the fact that they didn't have the so-called Trump put.

Katie Martin (4:17)

Yeah.

Rob Armstrong (4:18)

That the cavalry was not coming to the rescue. Yeah. Now, that may turn out to be wrong on Tuesday. One feature of this market is what is conventional wisdom on Monday is out with the trash on Tuesday.

Katie Martin (4:32)

Yeah.

Rob Armstrong (4:32)

So, but for now, we do not believe in a Trump put.

Katie Martin (4:36)

So this idea of a put is the idea that, you know, if bad stuff happens, don't worry, either the president or the central bank or someone else will come in on a white horse and solve the problem.