Justin Wolfers

and we don't know the probability and we really, really don't know the probability if we end up here or here, then small statements rationally lead to large re-evaluations of the value of stocks, of your future forecast for the economy, of bond rates, the whole nine yards.

So things are going to look crazy.

It will... But I think here this is not a statement about...

financial markets necessarily being temperamental.

It's more a statement about the president's inability to convince anyone that what he's saying he means.

And this is actually, I think there's one profound sense, there's many senses in which these are uncharted waters.

But one very profound sense is I don't think we've ever been in a situation like this where

The word of the president about what his intentions are is so uninformative about the future.

Right.

George W. Bush, when he said, let's go ahead, you kind of knew that's what he meant.

And when he said, let's pull back, you kind of knew what he meant.

And here, I think we're all just guessing.

Yeah, so I think it's been a question very much on a lot of people's minds.

So if your simple model was the president will do what he wants until he hears markets don't like it, when he hears markets don't like it, then he'll undo it.

And if markets can think one step further, then they'll see the president does what he wants.

It's not very good.

They think he'll undo it.

Given that they think he'll undo it, they don't need to move.

Right.

What's the equilibrium of this game?