Unhedged Podcast: Taco FTW

Date: January 22, 2026
Hosts: Rob Armstrong, John Foley (Editor of the Lex column, Financial Times)

Overview

In this episode, Rob Armstrong and John Foley unpack the latest market and corporate strategies in response to former President Trump's unpredictable maneuvers—most notably, his dramatic reversal on annexing Greenland. The conversation explores whether "strength" is the blueprint for corporations confronting Trump, the limits of corporate appeasement, and the evolving cycle between political volatility and market reaction. The hosts also discuss the global dependency on U.S. markets and end with their signature "Long and Short" segment.

Key Discussion Points & Insights

1. Trump's Greenland Reversal & The "TACO" Principle

• Theme: Trump initially threatened dramatic action (regarding Greenland), only to backtrack when faced with unified European opposition and shaky market reactions.
• Concepts Introduced:
  • "TACO": Trump Always Chickens Out (05:34)
    Whenever met with strength, Trump retreats; it's only in the face of weakness that he progresses.
  • "CAFO": Fool Around and Find Out (01:34)
    Applied to analyze the risk of defying Trump.

Rob Armstrong [01:34]: "Trump meets strength. He tacos. TACO. Of course, standing for 'Trump Always Chickens Out.' And... you get another acronym: CAFO. Fool around and find out."

2. Corporate Strategy in the Age of Trump: Does Butt-Kissing Work?

• Examples Discussed:
  • JPMorgan (Jamie Dimon): Dimon stood his ground against proposed credit card fee caps; Trump later dropped a lawsuit against the bank, with stock prices unaffected.
  • Amazon: Questioned for producing a Melania Trump documentary as a potential appeasement move.
  • Oil Majors (Chevron vs. Exxon):
    • Chevron tried to appease Trump but faced ongoing uncertainty and whipsaw decisions, especially regarding Venezuela operations.
    • Exxon confronted Trump, deemed certain ventures "uninvestable," and ultimately fared better in share performance.

John Foley [02:58]: "There aren't that many people who have stood up to him in a big way… but certainly there's not any real evidence that you lose by sticking up for yourself."

John Foley [04:27]: "Trump's memory seems to be short... he'll sort of quickly U-turn… oil companies have found this to their cost."

• Conclusion: The hosts suggest there's "no payoff" for corporate appeasement. Instead, a strategy of politeness and firmness—instead of ingratiation—is most effective for corporations.

Rob Armstrong [06:34]: "Taking a principled stand on certain issues would be very good for your corporate reputation and keep you out of trouble in the long run… polite but firm. And don't bother trying to ingratiate. It doesn't work."

3. The "Taco Cycle": Market Volatility as Trump's Political Currency

• Market Reactions: Economists note a self-reinforcing loop—markets expect Trump to retreat ("Taco"), which emboldens him until a market sell-off prompts another retreat.
• Investor Perspective:
  • Wall Street benefits from volatility (increased trading revenues), but fears "tail risk" (extreme shocks).
  • Possible for savvy traders to "buy the dip" if they can time market troughs induced by Trumpian statements/policy threats.

Aaron Dube (via Rob) [07:06]: "Markets want to price in Taco, but Taco only works if Trump sees stocks tank… Over time, this dynamic breeds bigger and bigger crises."

John Foley [08:34]: "Wall street loves volatility... But they don't love those... tail risk. They don't love things crashing, love things wobbling around a bit. And Trump is absolutely delivering that."

• Memorable Moment: Laughing over the absurdity of Trump threatening to invade a NATO country to gain market attention, blending gallows humor with market insight.

4. Trump's Power: Is He Losing It? And What of His Cognition?

• Power Limitations:
  • Many of Trump's executive powers are checked by Congress or are less potent than he claims.
  • Example: Failure to cap credit card fees via executive order, stymied by Congressional reluctance.
  • Tariff powers are also in question, with Supreme Court decisions pending.

Rob Armstrong [11:49]: "I would frame it in terms of being a wasting political asset. Like every second term president is, and especially an older person... He gets pushback from just enough congresspeople... He's feeling the power he might have enjoyed in his first term slip away from him."

• Cognitive Decline Speculation:
  • The hosts compare current narratives to past presidential cognitive lapses (Biden, Reagan, Bush), cautioning against confirmation bias but noting recent public mistakes and the White House’s defensive denials.

Rob Armstrong [13:01]: "That turned out to be true. He [Biden] was in cognitive decline, as we all saw in the debate. It also turned out to be true in the case of Reagan… there was also a lot of talk about this with George W. Bush."

John Foley [13:54]: "I would say the redder flag is the fact that the press secretary immediately tweets, denying that he said what he [obviously said] in front of everyone."

5. De-Globalizing from America: Is It Possible?

• Key Insight:
  • The chief executive of UBS declares that diversifying away from America is "impossible." There’s no substitute for the U.S. bond, stock market depth, or economic gravity.
  • Strong performance in emerging markets is often driven by U.S. prosperity, not a decoupling.

John Foley [15:49]: "Yeah, so I think it is a fantasy... What looks like diversification might almost be doubling down on the US."

• K-shaped Market Recovery:
  • Pain from U.S.-driven shocks is not evenly distributed. Consumer goods lag while tech and finance outperform, both in the U.S. and emerging markets.

Notable Quotes & Memorable Moments

• The TACO Principle (Rob Armstrong) – [01:34]

  • “Trump meets strength. He tacos… TACO: Trump Always Chickens Out.”

• On Corporate Appeasement (John Foley) – [02:58]

  • “There's not any real evidence that you lose by sticking up for yourself.”

• Chevron vs. Exxon (Rob Armstrong & John Foley) – [04:58, 05:42]

  • Rob: "Exxon CEO says it's uninvestable… Trump in a huff said something like, ‘Well, I'm thinking of not letting them in’… It's like, great, we'll be in Guyana making money."

• On Market Volatility (John Foley) – [08:34]

  • “Wall Street loves volatility. Volatility equals trading revenue for the banks… Trump is absolutely delivering that.”

• Diminishing Returns and Escalation (Aaron Dube via Rob Armstrong) – [07:06]

  • “Over time, this dynamic breeds bigger and bigger crises… it takes ever more extreme actions to convince them he might not Taco.”

• On U.S. Market Dominance (John Foley) – [15:49]

  • “I think it is a fantasy… What looks like diversification might almost be doubling down on the US.”

• Press Secretary's Bald Denial (Rob Armstrong; John Foley) – [14:20, 14:44]

  • Rob: “It was telling that the press secretary… chose to outright lie about it.”
  • John: “Lots of ice on boats.”

Important Timestamps

• 00:06 – Intro & framing Trump’s Greenland reversal
• 01:18–02:58 – "TACO" & CAFO discussion; corporate strategy
• 03:08–06:34 – JPMorgan, Amazon, Chevron, Exxon: Does appeasement work?
• 07:05–09:47 – The Taco Cycle & volatility; trading the cycle
• 09:55–13:54 – Trump’s power, cognition, and implications for investors/companies
• 14:20–15:49 – White House communication stumbles; red flags
• 15:49–17:34 – Can the world diversify away from the US?
• 18:03 – “Long and Short” segment

Long and Short Segment

• John Foley’s Short: Gronlandsbanken (Greenland's bank), after a speculative rally, is likely overvalued. [18:03]
• Rob Armstrong’s Long: The beauty of New York City in the snow, offering a poetic close to a turbulent discussion.

Conclusion

This episode of Unhedged delivers financial insight laced with wry humor, using Trump’s policy swings to draw lessons for companies, investors, and markets alike. Core wisdom: firms are best served by remaining “polite but firm” rather than currying favor, and market volatility—if skillfully read—offers both risk and reward. Despite America’s many quirks, there remains "no alternative" to its dominant place in the world’s financial system.