Markets to Slump With Trump

America has elected a would-be dictator as president, the European Union is disintegrating, UK Prime Minister Theresa May won’t last long as her nation prepares to secede from the EU, and China is poised to become an even more repressive society, the investor George Soros told Bloomberg Television from the World Economic Forum in Davos on Friday.

“It is unlikely that Prime Minister May is actually going to remain in power,” Soros said. She has a divided cabinet and base and Britons are in denial about the economic impact of Brexit, he said.

On Tuesday May, who took office in July after the UK voted to leave the EU, set out her strategy for a clean break from the 28-nation trade bloc and pitched the nation as open to making free trade deals globally.

Soros had particularly harsh words for US President Donald Trump. Calling Trump a “con man,” Soros said the billionaire will fail because his ideas are contradictory and his White House advisers and cabinet members will fight with each other, an apparent reference to the conflicting views expressed during Senate confirmation hearings. The stock market rally since the November election, spurred by Trump’s promises to slash regulations and boost spending, will come to a halt, Soros said.

“Uncertainty is at a peak, and actually uncertainty is the enemy of long-term investment,” said Soros, the chairman of Soros Fund Management. “I don’t think the markets are going to do very well. Right now they’re still celebrating. But when reality comes, it will prevail.”

Donald Trump was sworn in on Friday as the 45th president of the United States.

His inaugural speech on Friday painted an ominous portrait of the nation at the cusp of his administration: a place of violent “American carnage” where “rusted-out factories” are “scattered like tombstones” and the middle class’s wealth is “ripped from their homes.” 

His predecessor, Barack Obama, sat steps away. Trump promised an unapologetic nationalism that would protect US jobs.

 EU and China

The EU, Soros added, is disintegrating following last year’s Brexit vote and Italian referendum—a course that must be reversed. The trading bloc has become dysfunctional because it is governed by laws that are “not appropriate to the current circumstances” and not easily changed, he said.

“If Europe breaks down, the consequences will be very dire,” the investor said. “But I do see a way it could be saved, and this is also recognized by many of the people in Brussels. They can’t say so publicly, but they know that Europe is not functioning.”

Soros continued to take a dim view on China, saying the nation is at a decision point and must choose whether to become a more open or closed society as it transitions to a consumer-led economy.

“China has not actually succeeded yet in changing its growth model and probably won’t do it in the next two years because President Xi Jinping wants to maintain an unsustainable rate of growth,” he said. Xi “is doing that by rekindling the furnaces and producing more goods that are already in supply.”

Hollande Slams Trump

French President Francois Hollande on Friday denounced the economic protectionism repeated several times by his new American counterpart Donald Trump, local media reported.

Hollande made the remarks during a visit to a company located in the French department of Vosges (east), French television channel BFMTV reported, Xinhua said.

“It is not possible or desirable to want to isolate oneself from the world economy,” Hollande said, a few hours before Trump’s inauguration.

Hollande recalled that negotiations on a free trade agreement between the US and the European Union were “for the moment suspended, finally, in any case, postponed”, according to the report.

“For France, it was not possible to have commercial exchanges if there was not a recognition of the origin of products, whether agricultural, industrial or cultural,” Hollande stressed.