One Week of Trump Down, 207 To Go

In this week’s Trading Perspectives, Sam Clement and John Norris discuss the first week of President Trump’s second Administration. You can love or hate what he did, but one thing remains constant: the sun still rose in the East.

To listen to the full episode, click here. 

John Norris (00:29):

Well, hello again everybody. This is John Norris with Trading Perspectives. As always, we have our good friend, Sam Clement. Sam, say hello.

Sam Clement (00:35):

John. How are you doing,

John Norris (00:36):

Sam, I’m doing okay. Hope you’re doing all right. I’m doing great, Sam. Listen, I think we’re all doing okay and here we are on Thursday of inauguration week. Donald Trump, as you well know, inaugurated as the 47th president of the United States here this past Monday, and I got to tell you, the world did not stop revolving and the sun came up in the east. It didn’t rain fire and the seas didn’t spew up or what have you. Earth didn’t give up, all that stuff. I mean, nothing really fundamentally has seemed to change, but has it?

Sam Clement (01:10):

Well, it feels a little weird this time. It feels like he’s been president since the election.

Sam Clement (01:17):

And there’s always that little, you’re a fully lame duck at that point those last couple months, but it feels like this time it’s especially so and that he’s especially been president and the focus has been on him and frankly, I couldn’t have told you where Biden was the last couple months of his presidency. And so, it feels like we kind of were already in this period and then the 20th happens, noon rolls around, and we hit the ground running in terms of executive orders. And so a lot has changed, but a lot hasn’t changed.

John Norris (01:51):

Well, I’ll tell you, a lot has changed this go around. You may or may not remember 2016 and when Trump was inaugurated the first time in January of 2017, all of it seemed like maybe, I hate to dare I say it, a little bit of a joke at first. I mean, I remember writing Common Cents in our newsletter beginning of 2016 that I truly believed that Donald Trump was running for president in order to get a book deal. I mean, I thought he was just out there for grins trying to get some exposure because… I’m not sure if you know this, he likes media exposure. He does. Or at least he used to. A little bit of a narcissist, so I really thought he was out there really trying to inflate his already inflated ego, didn’t really think he could win, but he was going to stay in it for as long as he could because that just makes whatever sort of book deal after that that much more lucrative.

John Norris (02:41):

And then all of a sudden kind of surprised himself and… Hey, I could win this thing.

Sam Clement (02:45):

Yeah, he’d been talking or running for president for it seems like a couple decades at this point.

John Norris (02:51):

Yeah, no one took him very seriously. The Donald, he’s just that guy from the Apprentice…

Sam Clement (02:56):

Just part of the deal.

John Norris (02:57):

Just kind of that blow hard and all that stuff. And then when all of a sudden got down to it’s just like, oh my gosh, he could actually win this thing. I think it kind of stunned him too and wasn’t really completely unprepared to take over the reins of power as it were, probably went along with some of these sort of uniparty appointments that the Republican National Committee or what have you told him to do. The powers that be… this go around feels completely different. It comes in with a man who not only wants the job, I mean feels as though he’s got a mandate for the job. And it seems as though he knew exactly what to do on day one and exactly the type of people he wanted to have.

Sam Clement (03:36):

Yeah, I think you’re saying this, but it feels like it’s the Party of Donald Trump now where at least at the start in 2016, that was not necessarily…

John Norris (03:47):

It felt like the Uniparty. A friend of mine calls it the Uniparty.

Sam Clement (03:50):

But he was an outsider still, and I guess it doesn’t feel like he is now…

John Norris (03:53):

An outsider to the Republicans and the Democrats as well.

Sam Clement (03:56):

But now he was an outsider to the Republicans clearly with the idea that he wasn’t supposed to be the candidate for quite some time, and then now the party is wrapped around him to where he is the Republican Party. I mean, he sets the policy direction. We’ve seen issues that Republicans have changed vastly on to align themselves with President Trump’s policies or feelings on them. Yeah, so it is crazy. You have all these trickle down effects of that with who he’s going to nominate for positions and what have you. But the difference is he goes from being an outsider to, he is largely the Republican Party currently.

John Norris (04:40):

And so when you take a look at that, understandably, I would say some people on the left side of the aisle, but to the very far left end of the aisle, if you catch my drift, really, I mean we’re wringing their hands and gnashing their teeth. I mean the world was going to end. And here we have the inauguration, actually, you had some celebrities willing to show up this time, actually perform. You had some business titans actually willing to show up. You had some people that go, okay, well, I guess the thought process is this is what it is four years, like it or not, we better play the ball game this go round.

Sam Clement (05:15):

Yeah, we’ve talked about that. Companies at the end of the day just kind of want to know what the rules are, and so we have a new set of rules or direction for those sets of rules that we will get for at least two years probably, or at least the direction they’re going, but probably four years. And so you’ve seen companies mostly get on board with that. And we’ve talked about a pendulum swinging back and forth, and I don’t fully buy the mandate terminology, but it was a complete sweep of the swing state.

John Norris (05:51):

It was a good solid victory for Donald Trump and the Republicans. Mandate to me is sort of what Reagan did in 1984. I mean, that’s a mandate. What Nixon did to McGovern. I mean, that’s a mandate. This, Hey: you won a good election. I mean, very impressive. You came out of nowhere, you got creamed the last election and you turned it around this go around, and not only did you turn it around, you picked up percentage points in New York, picked up a couple points in California,

Sam Clement (06:19):

Jersey,

John Norris (06:19):

All that stuff. You did much better. Obviously the Republicans have both houses of the Congress. Mandate to me is not, hey, 53 to 46 or 40, especially the house. Just all of it. It’s way too tight. You still have to get some kind of commonality, bipartisanship, all that stuff, but that’s not really the point of this. The point of this is I want to know what you think here about the first week about the various executive orders that have come out there and just tell me what you think the markets are feeling.

Sam Clement (06:59):

I think that the biggest difference right now is that we are at a point where it feels like he means it more this go around. We’ve seen, again, that this is not about who he’s nominating, but he’s gone from nominating the classic Secretary of Defense…

John Norris (07:17):

The guy that’s been around for a while.

Sam Clement (07:19):

Yes.

John Norris (07:20):

That is perceived to be a Republican.

Sam Clement (07:21):

Whether he’s, whatever name it is, they’ve done kind of the exact same thing for their career leading up to that point and almost for every position just about. And that is symbolic of the change that I think we’ve seen from him and we’ve seen it in how he’s talking to the media. We’ve seen it in executive orders with D.O.G.E., whether that ends up doing anything or not, that he means what he’s talking about. And so I think that’s the biggest difference, the biggest takeaway. We’ve talked about it in the past couple of weeks, how executive orders have become a bigger part of the political scene. Unfortunately. Whether that’s constitutionally legal or not, that’s not by the way, but that’s where we are now. It’s pretty clear. And I think his goal is doing exactly what he has set out to do and he knows how politics works a little better than he did the first go around.

John Norris (08:16):

Well, so have any of the executive orders surprised you?

Sam Clement (08:19):

Not really.

John Norris (08:21):

I mean, he said he was going to do them, right?

Sam Clement (08:23):

Yeah. I guess that’s what’s surprising. He said he was going to do it and he did it for him this go round. I was kind of expecting that he was really meaning what he was saying he was, but this has been the case for so long, for so many people talking about what you’re going to do and then nothing ever really comes of it. And so that seems to be the biggest change from his first go round to this go round. He’s talked about all the major executive orders that he’s passed. He’s talked about these issues.

John Norris (08:53):

Anything surprising?

Sam Clement (08:55):

Not really. I mean, I don’t know what would be surprising about it.

John Norris (09:00):

Anything you ever found kind of comical?

Sam Clement (09:05):

Well, today, this is not an executive order, but today he said he’s going to demand lower interest rates.

John Norris (09:12):

Well, how about that?

Sam Clement (09:14):

I would love for him to demand that. It’s like Michael Scott declaring bankruptcy. You can’t just declare it. And I’m not sure any country that the leader sets interest rates is not one that we’re necessarily looking up to. I can only think of a handful and they’re dictators.

John Norris (09:35):

I guess now you live in one.

(09:38):

The one that really kind of caught my attention was the removing of those 51 people that signed that letter talking about Hunter Biden’s laptop being classic sign of Russian misinformation or something along those lines. And well, he just removed all their security clearances. And I have read in the media somewhere that John Brennan was out there, former CIA Chief John Brennan was out there, and he was one of the ones that signed on there and very vocal anti-Trump person. He signed on there and he was of course one of the ones that’s gotten his security clearance completely removed, and he was lambasting Trump for doing so – called him a child and all that stuff. He said he was being childish and perfect politicizing blah, blah, blah and all that stuff. And I kind of wondered why are you so surprised, John?

Sam Clement (10:31):

Yeah,

John Norris (10:31):

I mean listen, hey listen, great life of public service, all that stuff, but you knew what you were doing when you signed the letter. You knew that you were intentionally trying to alter, I mean, steer Trump away from something or make it seem like he was in cahoots with… you knew what you were doing. So why are you surprised when, you lied under oath and you lied.. that you are now getting your security clearance revoked?

Sam Clement (10:57):

Yeah, it’s kind of…

John Norris (11:00):

So that was one, and I would fully expect if it was the other party in power, I would fully expect the exact same thing.

Sam Clement (11:07):

Yeah.

John Norris (11:07):

Now, the one thing that I have noticed this week and what some people have found surprising, what they’ve been asking me seemingly ad nauseum about is in the fact that at least in the executive orders that Trump has signed so far, there’s been a noticeable omission. Do you know what that is?

Sam Clement (11:23):

Cryptocurrency?

John Norris (11:24):

Well, not just that, but tariffs. He has not signed anything yet about tariffs. And my stock response is: you got to understand tariffs are the start of the negotiation for these people.

Sam Clement (11:37):

He’s talked about that.

John Norris (11:38):

He’s talked about that and he is like, wait, pretty straightforward if

Sam Clement (11:41):

You’re not going to do blank.

John Norris (11:42):

Well, he told the people in Davos today, if he was on Zoom or Teams or whatever it was and said, listen, you come build your product here in the United States, you pay no tariffs. If you do X, you pay 10%. If you do this, you pay 25%. The Chinese, they’re going to pay 60% because of X, Y, and Z. So for me, it’s kind of like it’s all out there. What do you think foreign countries are going to do? Is anyone going to bite on this or are they just going to try to call his bluff and say, nah, we’re not going to believe it.

Sam Clement (12:13):

I think they’re buying it to an extent, and I think companies are as well, and I think we’ve seen terrorists, he’s willing to do this. This is one, he’s not just talking about it and he’s going to crack on it. He’s going to implement tariffs if you don’t do what he wants you to and this talk of an external revenue service and what have you, but this has clearly been maybe his biggest sticking point in terms of economic policy. It probably has to be the biggest.

John Norris (12:49):

I think he’s thrown it out there for so long and so loudly. It is, whether it is or,

Sam Clement (12:55):

I will say one executive order that surprised me and not in a positive way. I think the pausing of spending on health research and the health institutes… it feels

John Norris (13:08):

Getting out of the WHO was kind of a head scratcher.

Sam Clement (13:10):

And pausing some of these research studies that take three to six months pausing those, and this is cancer research. He feels like he has been screwed by some of these government organizations, and I’m not going to argue whether that’s the case or not, but the unintended consequences around this I think are vast and I think puts us behind the eight ball in terms of medical research. And I don’t feel good about that. I personally don’t feel good about RFK leading the Department of Health and Human Services. An environmental lawyer. An anti-vaxxer environmental lawyer. Yeah, I could go on and on about it.

John Norris (14:00):

What about the raw milk

Sam Clement (14:01):

Pasteur is just rolling over in his grave.

John Norris (14:04):

It’s quite a mess, by the way. What about mandating that American cartographers change the Gulf of Mexico to the Gulf of America USA?

Sam Clement (14:16):

That one makes me think back to what John Fetterman said before he got elected. He goes, we can’t freak out about everything this guy does. We are what, three days into it?

John Norris (14:28):

Renaming Denali back to McKinley again, I don’t mean just some of, to me, listen, I think probably, I don’t care if you’re a Trump supporter or not, but I certainly know that the criers will agree with me on this. Everything else that’s going on in the world out there, everything else that’s going on in the economy. And one of the first things you do is you renamed Denali back to McKinley?

Sam Clement (14:54):

And people up there are still going to call it Denali. I mean McKinley has no, I’m not sure he ever even went to Alaska. I’m not sure why this mountains was ever named after, so I just don’t, it’s going to be called Denali by Alaskans.

John Norris (15:07):

Listen, that’s where there might be some generational differences. When I was growing up, it was still McKinley. Pluto was a planet.

Sam Clement (15:11):

That’s fine, but people up there aren’t calling it… It’s been Denali for what, a thousand years? How old do you think I am? What’s the matter with you? I’m like, people are going to call it what they,

John Norris (15:25):

It’s been called Denali for 35, 40 years.

Sam Clement (15:27):

And it’s been a mountain for thousands, millions.

John Norris (15:31):

So the Gulf of America, what do you think about that one?

Sam Clement (15:34):

I just don’t care about this stuff. This is what comes with a Trump presidency.

John Norris (15:41):

To me, those are things that could have happened on the very last day in the last 12 minutes of the Trump presidency and I suppose anything else.

Sam Clement (15:48):

But I guess he has a wide, vastly different ideological base of people that are supporting him.

John Norris (15:58):

Listen, I guarantee you there are people out there just, oh yeah, even with it should be the Gulf of America.

Sam Clement (16:03):

Even with the pardons, which I guess did surprise me too. There’s been articles coming out, the just Pardoning pretty much all of the January 6th people, including ones who tasered cops. So I’m not sure about those, but not

John Norris (16:19):

Not real sure about that.

Sam Clement (16:20):

Look, I’m not, look, I think probably a lot of them were politically persecuted, but either way, you tase a cop and

John Norris (16:31):

If you tase a cop, you should spend some time in the poke.

Sam Clement (16:36):

And I guess they did, but that’s neither, neither here nor there.

John Norris (16:39):

I do want to go back to tariffs. I have been getting asked about that a lot and I did think it was very telling that that has not been one of the things that Trump has signed into executive order yet. It’s out there. I think he said February for some of these people and they’ll push that back again as long as people are at the negotiating table. And the concern that people have had, at least when they’ve asked me, and I’ve made several, I guess I’ve made five public presentations already this month and everyone’s asked me the same thing. Is this inflationary? Is this inflationary? And the quick answer to that is maybe. That’s a lukewarm answer. It’s what you might not expect if someone’s up there getting up there talking about the economy and what have you. But it’s not necessarily inflationary because for a number of different reasons. One, we don’t know whether or not they’re going to be enacted and if so, to what degree. That’s one. And then two, if producers or importers could simply pass along all of their increases in costs to the consumer, no one would ever go out of business.

(17:42):

So they just can’t blindly do that. If all of a sudden you’ve got that let’s call it elastic goods out there.

You’ve got the fire table for your patio that you’re looking to get. And let’s say that bad boy runs you around two grand. That’s a fancy one, right? Let’s say you’re looking at this, it’s a nice end, but this is a piece you’re going to have for a while and then all of a sudden, hey, you decided to pull the trigger on it, but 50% tariff on that bad boy, are you willing to go from 2000 to 3000 to buy? Probably not.

Sam Clement (18:20):

Yeah,

John Norris (18:22):

You’re not going to pay it. And so that retailer isn’t going to go, well, no, I’ve got to pay for the tariff and all that stuff. It means that someone’s going to eat it, but it doesn’t necessarily have to be the consumer.

Sam Clement (18:32):

And Scott Besant talked about this, the new treasury secretary, it’s not necessarily inflationary in the sense that yes, it’s inflationary in that some prices are going up, but that’s not necessarily the definition of inflation. If you are sacrificing then on something else. We are not creating new dollars into the system. That’s the true cause of inflation. We’ve talked about it when we saw the money supply shoot up after 2020. It’s inarguable when there’s more supply of something, the price of it goes down or the value of it goes down and the value of the dollar goes down with the supply of money. So if we don’t increase the supply of money and you increase the price of some goods, and if you need some, you’re going to, if I needed that table, I’d have to suck it up and pay the $3000. But then you know what I’d probably do is probably not purchase a few other things.

John Norris (19:27):

You might not purchase the chairs to go with the table.

Sam Clement (19:30):

Exactly. So this net inflation doesn’t necessarily happen without an increase in the money supply.

John Norris (19:36):

And that’s important to note because just because some products may or may not go up in price doesn’t mean that all products go up in price. And so that’s really what the powers that be, what they’re considering before we make any changes to monetary policy, are prices going up across the board? Is there too much money sloshing about in the system? And we have general price increases across the board. That’s inflation. Not that, hey, the cost of fire tables went up 25%.

Sam Clement (20:09):

Let’s hike rates.

John Norris (20:12):

So we’re going to hike rates on that. Because if that happens, guess what price of clothing might go down or something else because your demand for that other stuff evaporates. You don’t have any cash anymore.

Sam Clement (20:25):

The part that is not knowable right now with something like that is where leverage plays into that. Leverage is where money can be created in the banking system.

John Norris (20:37):

I’m going to tell you right now with revolving debt credit cards on average at 22.8%, I don’t think there’s a ton of leverage out there.

Sam Clement (20:45):

But that’s the part of the equation where some prices go up and you don’t want to sacrifice on other things. You start taking out leverage in the fractional reserves, you can start to create dollars kind of out of thin air.

John Norris (20:58):

That might be a good topic for another podcast. So all told here we are first week of the Trump Administration. How do you think it’s gone?

Sam Clement (21:07):

Close to how I would expect it to. The main things that he’s talked about have been kept, the main things. He’s had some questionable anti-science people and policies in place or put in place with NIH and Health and Human Services, but outside of that, I think most of it is gone kind of as expected. And I don’t mean that in a good way or bad way. He’s talked about these things. He’s talked about pardoning January 6th-erss, he’s talked about tariffs. I get those haven’t been implemented yet, but

John Norris (21:37):

He even talked about the Gulf of America

Sam Clement (21:39):

And so these things, Panama… Rubio’s on his way down there right now. So these things that he’s talked about, he’s doing or working on so

John Norris (21:49):

Well, I do have to ask one more. While you were talking, it just came across the transom of my mind. What’s your take as a Gen Y, millennial, Z, whatever you are, what’s your take on United States taking over Greenland? Does that sound crazy to you or… what’s your feeling on that?

Sam Clement (22:11):

We’ve done it. Look, taking over it sounds a little crazy, but working out a deal for it sounds completely valid. I mean, I think the Arctic will become continuously more important. We did it with Alaska. We purchased Alaska, we had the Louisiana purchase. We have a history of purchasing large swaths of land, so I don’t get how that’s some new insane idea and I’m sure there could be a deal worked out for it that’s mutually beneficial to…

John Norris (22:42):

What do you think the Danes think about it or do you care?

Sam Clement (22:47):

We’re a lot larger and more powerful than the Danish and I don’t mean with our military, which we are that as well, but I think there could be a financial deal that works out to where we…

John Norris (22:59):

The Danes might not completely like it, but it works out well for them?

Sam Clement (23:03):

It’s just not a crazy concept. This is something that large countries do and it’s a resource, possibly resource-rich country in a geographically important area. Why is that an insane idea to pursue?

John Norris (23:21):

It just sounds weird, doesn’t it?

Sam Clement (23:23):

Sure. I’m sure Alaska sounded weird. I mean, we got a pretty good deal with Louisiana.

John Norris (23:30):

Actually we got real good deals with both of those purchases.

Sam Clement (23:31):

Yes. So maybe we get another good deal.

John Norris (23:35):

All right. I got to tell you, here we are at the end of the first week of the Trump presidency part two and things are going to Sam and really probably to a lot of people, things are kind of going as folks thought they would go or should have thought that they would go. President Trump has delivered on a lot of his core promises and what he said he was going to do on day one. He’s done a lot of it. As crazy as it may sound, as much as many people don’t like some of it, he told us he was going to do it and by God he is going to do it. And like him or hate him, for an American politician, when someone does what they say they’re going to do, it’s actually kind of refreshing.

Sam Clement (24:14):

A little out of the norm,

John Norris (24:16):

A little out of the norm whether you like it or not. And I think we clearly have another four years of this and people are just going to have to get used to it and there’s going to be a lot of bluster. There’s going to be a lot of bologna out there. The worst-case scenario is not going to happen, and everyone that’s standing on the ledge thinking he’s going to drive us to ruin, I sit there and tell you one thing he said. He has said he’s going to do this and he’s not going to drive the economy into the toilet. That’s one thing I had to tell someone this at a presentation the other day. I said, you may hate him, but he’s not an idiot. He’s not a dumb person and he’s not going to continue to do something that is going to completely throttle the US economy when his whole shtick is grow the economy and make America great again. He’s not going to intentionally do quite the opposite and that, by that I mean intentionally, and so we’ll just have to see how it all shakes out.

Sam Clement (25:16):

Buckle up,

John Norris (25:17):

Buckle up baby. It’s going to be one heck of a wild ride.

Alright guys, thank you all so much for listening. We always love to hear from you. Also, if you have any comments or questions, please by all means let us know. You can always reach us at or you can leave us a review on the podcast outward of your choice. Of course, if you’re interested in reading more or hearing more of what we got to say or how we think, you can always go to oakworth.com, O-A-K-W-O-R-T h.com. Take a look underneath the Thought Leadership tab and find links to all kinds of exciting information, including previous episodes of Trading Perspectives. Links through our newsletter / blog Common Cents, as well as our quarterly analysis piece. Macron Market, a nice magazine, which is really out now. If you go out there right now, you see brand new stuff out there with Macron Market, it looks dynamite. Our marketing department really did a fantastic job. Sidney Fry down there, really did a great job formatting everything and it looks beautiful. So go out there and take a look at it. Of course, we have other exciting information out there by the advisory services group, Mac Frasier, and the gang, and so by all means, go out there and take a look. Alright Sam, any last comments, questions, opinions, anything like that? That’s on this all I’ve got. Exciting topic today.

Sam Clement (26:30):

That’s it.

John Norris (26:31):

Alright, that’s all I’ve got today too. Y’all take care.