After the Bell: Where are Trump’s indicators?

This morning, in one of those things that must happen 15 times a rush hour, I found myself at the scene of an accident. It immediately made me think about oil prices and the conflict between the US, Israel and Iran.

I had dropped my daughter off at school at seven in the morning and was heading to a meeting at 8am. As I was trying to turn right into a very busy road a small gap opened up. If the car coming on the left towards me was going to turn left, I would be able to take it.

That car did indeed turn left. But it did not indicate. Which meant I could not go and I missed the gap.

After not swearing under my breath (I’m trying to be a better person in the traffic – feel free to wish me luck with that) I waited and eventually was able to turn right and get going.

After losing more of my life in jammed traffic than I’d like to dwell on, I was finally under the bridge where Corlett Drive joins the M1 (just in case you’ve never been in Joburg, and thus are from Cape Town, Corlett Drive is home to many things, including the world’s silliest parking at Melrose Arch and, more excitingly, The Wanderers).

I was at a robot, trying to turn right onto the highway. The car in front of me was doing exactly the same, we were waiting for a gap.

Suddenly there it came - one of those tiny vehicles that is really a small taxi but seems to use a motorcycle engine. It indicated it was turning left onto the slipway, and off went the person in front of me.

However, the quadricycle did not turn left. It went straight.

The result was nearly catastrophic.

It drove straight into the car in front of me, and that poor driver was pushed into the robot head first.

While the quadricycle was damaged, the car in front of me was in much worse shape.

About half an hour later, with ambulance people on the scene, satisfied that the person suffering from the completely understandable shock of what had happened was in good hands, I went back to my car.

After glancing at the poor robot, lying on the ground but still doing its duty, blinking in its uniform of red, orange and green, I was on my way.

Strangely, now that I had a moment to myself (albeit on the busy M1) my first thought was how important indicators are.

One of the major reasons oil prices are so high at the moment, and why so many market indicators are so volatile, is because none of the people involved in the current Middle East conflict is using their indicator.

The one thing analysts seem to agree on is that there is no indication what the Trump administration’s end game is. Does he just want to remove the entire regime in Iran? Or kill as many members of the Khamenei family as he can?

Or does he want something else?

Without that clear indication, no one knows how long the conflict will go on. A century ago, if an army was approaching their enemy’s capital you knew the war would end soon. In this kind of forever conflict that we might be approaching now, there is no such signpost.

And without signposts, the only way you can know what is happening is when people use their indicators.

This is something our current market system, particularly for listed companies, does particularly well.

Because firms have become good at indicating what they are doing, markets are not shocked when they do it.

If you tell the market that in six months this long-serving CEO will retire and be replaced by this long-serving deputy, your share price won’t move.

This is also because institutions become good at indicating long in advance. The person who was the deputy might have been hired as the potential successor, and the market would have known that many years before the date they were due to take over was announced.

When you see major changes in a company’s share price, it’s often because they have made a major change without indicating that it was coming.

This shows that they are making it under pressure, or do not have control of a particular situation.

Frankly, the lack of indication from the Trump administration is what keeps me up at night. If you don’t know what he is going to do, you don’t know what will happen to you.

My gut is to think that higher oil prices will force Trump to chicken out, when he realises that his constituency won’t put up with it.

But I don’t know that for sure. Which means I can’t tell you what will happen.

And if he decides to indicate that he’s turning left but keeps going straight, then all of us could be pushed, head first, into a robot.

Which in this case would be the oblivion of a forever war, with all of the horrendous consequences. DM