Axios PM

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December 14, 2018

Situational awareness: The Dow Jones Industrial Average fell 2% (497) today, while the S&P 500 fell 1.9% and Nasdaq Composite dropped nearly 2.3%. All three are now in correction territory.

1 big thing: Trump burns the firewalls

Illustration: Rebecca Zisser/Axios

As we approach the weekend, it's worth remembering two abnormal signals to the world this week from President Trump.

Driving the news: In two cases involving his China trade war, President Trump suggested the U.S. should ignore historic separations of power and precedent if it yielded good results, Bloomberg's Shawn Donnan writes.

  1. Trump said the Federal Reserve should keep rates low to help the economy weather the trade war.
  2. Trump suggested he'd help free a Huawei executive that the U.S. is currently trying to extradite from Canada.

Why it matters: "U.S. officials have struggled for decades to convince suspicious foreign counterparts about the separation of powers ... They didn’t persuade all of the people all of the time — but the framing was central to America’s ability to lead by example," Donnan notes.

  • One example: "The U.S. worked hard to convince Japanese governments since the 1980s, for example, to stop trying to influence currency markets via public statements, according to Mark Sobel, a former senior Treasury official and U.S. representative to the International Monetary Fund."
  • “'We used to criticize everybody else for open-mouthed operations,' Sobel said."
  • "When we open our jaws about currency matters, it definitely gives license to others.”

Between the lines: There's been no Federal Reserve chairman in recent memory who has had to defend the central bank's political independence as much as Jerome Powell, Axios' Courtenay Brown notes.

  • Any shift in Powell's tone about future interest rate hikes will be met with skepticism about whether or not Trump is getting to him.
  • What makes Trump different is that his Fed criticism is public for everyone (and other world leaders & central bankers) to hear.

The bottom line: Norms and precedents are boring. The lack of them is interesting, but almost always at a severe cost.

Bonus: Pic du jour

Photo: Alex Wong/Getty Images

Ruth Bader Ginsburg speaks during a naturalization ceremony at the Rotunda of the National Archives, which held the ceremony to mark Bill of Rights Day.

2. What you missed

  1. Chris Christie told Trump he doesn't want to be considered to replace John Kelly as White House chief of staff. Go deeper.
  2. A Facebook bug in late September allowed outside apps to access photos they weren't supposed to, including some that users uploaded but hadn't posted. Go deeper.
  3. It looks like Robinhood's new checking account, which pays 3% interest, is not going to fly. Go deeper.
  4. Michael Cohen insists Trump knew about the hush money he gave to Stormy Daniels and Karen McDougal. Video.
  5. 1 podcast thing: Axios' Dan Primack talked with the former attorney for Karen McDougal about what we learned this week about Trump, payoffs and the National Enquirer. Listen.

3. 1 fun thing

Charles M. Schulz in his office in Santa Rosa, Calif., in 2002 (Ben Margot/AP)

"Charlie Brown, Snoopy and the 'Peanuts' crew will have a new home on Apple’s streaming service," the AP reports.

  • "The global children’s content and brands company will develop and produce original programs for Apple including new series, specials and shorts based on the beloved characters."

Go deeper.