Source: Wall Street

It seems that overnight, Gary Gary Cohn has become the focus of American politics and China Finance Online Co Ltd.

On Thursday morning, global markets were "stumbled" by an unconfirmed piece of news. After the news that Cohn resigned as director of the White House National Economic Council, US stocks fell rapidly, with the Nasdaq down more than 1%, the Dow down more than 130 points, the "panic index" VIX soaring, up more than 20% in the day, and the prices of gold, yen and US debt rising higher and higher.

It was not until the news was refuted by market participants, and the White House said bluntly in its statement that all reports that were not in line with Cohn's job were "100% wrong." it was only then that the decline of US stocks gradually narrowed and safe-haven assets fell.

Cohn has become the most important person in Washington, Wall Street and possibly the country as Trump's response to the "white man supremacy" riots has sparked controversy and the negative impact continues to simmer and dissolve the two White House executive advisory committees.

Jake Novak, a senior columnist for CNBC, points out that the president now needs Cohn to remain in office. Because the Trump administration wants to maintain some form of support for policy from US business and investment leaders, both formally and informally.

Novak believes that Cohn is more important than most previous directors of the National Economic Council, and he is the main force driving White House policy, especially tax reform.

Carry market confidence in Trump's new deal

Wall Street mentioned earlier that Jeffrey Sonnenfeld, a professor at the Yale School of Management, commented earlier on Thursday that the market is now confident that Cohn will help promote Trump's tax reform. "if he leaves, the market will collapse. "

John Engler, a senior politician and Republican who has served three terms as governor of Michigan, also spoke highly of Cohn, saying

"he is the star of the Trump administration. He is an important figure in figuring out how we are moving towards tax reform and infrastructure (policy). "

Novak pointed out that the main reason why Cohn is critical to Trump is that he has always valued the rise of US stocks during his tenure and is proud of it. Once Cohn leaves office, the stock market will plummet, which will deal a heavy blow to his personal image.

Mike Baele, managing director of wealth Bank Private Client Reserve, commented on the market turmoil on Thursday that the Cohn rumors "absolutely disappoint investors who are hopeful about tax reform." This does not mean that it will not happen, but it will certainly hurt the prospects. "

Influence the trend of Trump's policies

Novak believes that US politicians are still watching to see whether the current situation will increase the influence of Cohn and make him more influential on other policy issues that are still controversial by the Trump team, such as trade policy. Cohn has been opposed to aggressive trade restrictions and retaliation against China, while Bannon, Trump's chief strategist, has taken the opposite attitude.

If Cohn's views prevail, the US political and corporate establishment will breathe a sigh of relief because the Cohn supports economic and trade policies in favour of the establishment.

While some conservatives worry that Cohn supports environmental policies such as the Paris agreement and may support a carbon tax, and some in the Democratic Party do not approve of Cohn's priority tax policy, the greater significance of the White House's retention of Cohn is to show that the Trump cabinet still recognizes the establishment, even if only ostensibly, rather than supporting it.

The "last straw" that crushed the White House

Last Friday's "white supremacy" parade set off the worst storm of racism in the United States in a decade. Since then, Trump has vaguely said that both sides have a responsibility to avoid critics of white supremacism, saying only to "condemn hatred from many sides." This has led to the collective dissatisfaction of both parties and public opinion in Congress. Since Monday, several corporate CEO have announced their withdrawal from Trump's advisory committee.

Wall Street previously mentioned that Cohn is Jewish, and the "white supremacy" march is actually a scuffle between neo-Nazi demonstrators and opponents. On the day Trump made the remarks on Saturday, Cohn stood next to him, preparing to answer questions about infrastructure legislation. The US media learned that although Cohn did not leave the cabinet, he was unhappy with Trump's response, "disgusted" and "extremely disappointed".

To make matters worse, the departure of Cohn could be the trigger for the fragmentation of the White House after the dissolution of the two White House business leaders' advisory committees on Wednesday and the abandonment of Trump by the business elite. A White House insider told the US media Axois:

The danger for Mr Trump now is that the resignation of a senior official could trigger a bank run-like situation, and as long as one important official resigns, many others are likely to follow suit.

That will affect the legislative process of Trump's New deal. According to Axois, Trump has no real friends in the Senate, and his poll ratings have fallen again and again, which is not a moral role model, making it even harder for him to implement a new policy.