Dow takes nosedive as US President Trump tweets more threats against misfit North Korea. Kirsten Levermore explores how what leaders say can have unforeseen consequences
Graph as reported by: Google Finance – Yahoo Finance – MSN Money
Trump is at it again – Tweeting criticism and threats without restraint. This time, however, the target is bigger than a satirical comedian or opposing political candidate, as President Trump’s sights are set on North Korea in one of the most impactful Twitter wars ever seen. And the verbal conflict is having real consequences on today’s markets.
Spooked traders and shaky markets mean bad things for the global economy. In this case, what’s largely considered the market that illustrates “the state of things”, the Dow Jones Industrial Average has today fallen a whopping 204.69 points – its biggest drop since May 2017. And, to make matters worse, the CBOE volatility index (VIX), known as the best gauge of fear, has spiked to its highest level since the US presidential election.
This rattle of the markets makes for one of the most illustrative examples of what can happen when leaders become too reactive and too outspoken – your words have serious repercussions.
Actions have consequences
There has been a lot of talk about the escalated aggression between the US President and North Korea on Twitter potentially leading to real-life conflict. But this dive in the stock market is a relatively unforeseen consequence of a leader who perhaps does not understand how powerful his words have truly become.
As part of a webinar series earlier this week, Marshall Goldsmith related a story of a new leader of a global corporation who realised that, with his immense power, came the knowledge that his “suggestions were now orders”. In other words, Goldsmith’s client understood that there was no longer such a thing as a flippant comment or reactive exclamation. Words from the mouths of true leaders carry a weight they must know intimately.
If President Trump grasped this notion and accepted his new role, as one of the most powerful people on the planet instead of a simple reality TV star, perhaps we could expect a different behaviour from him?
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