Wall Street Sinks on Greenland Risk

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Prof G Markets 35 min 4 speakers 8 chapters transcribed
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How did U.S. markets react to Trump's Greenland acquisition threats?

Ed Elson 0:01
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Ed Elson 0:38
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Unknown 0:45
Thank you.

What were the implications of Trump's tariff threats on Wall Street?

Unknown 1:08
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Ed Elson 1:24
Today's number, 25. That's how many years old Wikipedia turned last week. That means it can no longer date Leo DiCaprio. Welcome to Profity Markets. I'm Ed Elson. It is January 21st. Let's check in on yesterday's market vitals. The major indices sold off in their worst session since October, Bitcoin dropped below $90,000, the dollar weakened, and the yield on 10-year treasuries jumped to its highest level since August. Okay, what's happening? The S&P plunged 2% yesterday, erasing its gains for the year as Wall Street reckoned with President Trump's escalating threats to acquire Greenland. Volatility spiked with the VIX, the market's so-called fear gauge, hitting its highest level since November. And you guessed it, gold hit another record high as investors ran for cover.
Ed Elson 2:31
The drama is playing out in Davos right now. as business and political leaders gather for the World Economic Forum. President Trump arrived yesterday, and he agreed to meet with officials to discuss Greenland. But he says, quote, there can be no going back on his plan to seize the territory. Meanwhile, Greenland's prime minister is urging the island to prepare for an invasion, which is still unlikely, but no longer unthinkable.
Unknown 2:58
How far are you willing to go to acquire Greenland? You'll find out.
President Trump!
Ed Elson 3:03
Okay, joining us now to discuss everything that is happening here, we're speaking with Justin Wolfers, Professor of Public Policy and Economics at the University of Michigan. Justin, welcome back to Profiteer Markets.
Justin Wolfers 3:17
Would you believe me if I told you I was coming to you live from Greenland?
Ed Elson 3:23
I'm not sure I would. I'm not sure I would. It looks the same. It looks like you are in Ann Arbor right now. Is that right?
Justin Wolfers 3:30
It's as cold as Greenland, mate. And we have been taken over by federal authority as well.
Ed Elson 3:35
Right, right. It's not too dissimilar. Well, what's happened in the markets is quite astounding, really. Stocks are plunging, yields are rising, all the safe haven assets like gold are hitting record highs. I guess let's just start with your initial reactions. It's kind of remarkable what we're seeing here, at least to me. Do you feel the same way?

What were the highlights from Netflix's latest earnings report?

Justin Wolfers 4:04
Look, The thing that's more remarkable than what's happening in the markets is what's happening in the world. Right. The president woke up and decided the United States needed Greenland, which had never been part of the US, well, not never, in recent years hadn't been part of the US security planning at all. And he's saying he wants to buy it, take it, something it, rename it. No one's quite sure what. And he's putting tariffs. on countries who've sent vast forces of up to dozens of troops to defend Greenland from American hostile aggression. That is astonishing on its face. I know that your podcast is called Markets.

How did Netflix's stock react to its earnings announcement?

Justin Wolfers 4:51
Mate, sometimes we've got to pause on the world. The world's where the action is. So yes, markets are responded to this.
Ed Elson 4:57
I guess the reason that the markets response seems relevant to me is we see a lot of crazy stuff.

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