With economic optimism soaring since the election, rising risks to the economy and financial markets have fallen off Mr. Market’s radar. However, there are a number of reasons to believe Donald Trump and his advisers are well aware of these risks and have already made plans to address them sooner rather than later.

To this point, Mark Spitznagel recently wrote, “The ‘big, fat, ugly bubble’ in the stock market that President-elect Donald J. Trump so astutely identified during his campaign now becomes one of the greatest potential liabilities of his presidency.” From a political standpoint, the sooner Trump and his administration deal with these risks the easier it will be to blame on the prior administration. Allowing them to fester for any period of time increases the likelihood they will take the blame for the bubble’s bursting.

Interestingly, Trump recently named Carl Icahn as a special advisor to his new administration. You may remember that Icahn recently warned of “Danger Ahead” for risk markets:

I’ve seem this before a number of times. I've been around a long time and I saw it ’69, ’74, ’79, ’87 and then 2000 wasn’t pretty. A time is coming that might make some of those times look pretty good… The public, they got screwed in ’08. They’re gonna get screwed again. I think it was Santayana that said, “those who do not learn from history are doomed to repeat it,” and I am afraid we’re going down that road.

So Trump is clearly not running away from his famous “big, fat, ugly bubble” comment. Just the opposite. In fact, it was probably Icahn who helped him to fully appreciate just how dangerous the current situation is. In naming Icahn to his special advisory position he is demonstrating that he takes the risks currently posed by the financial markets very seriously.

In a recent interview on CNBC, Icahn echoed his concerns once again:

Most telling is how Icahn ended the interview, unprompted. “If you’re asking me am I concerned about the market on the short term. Yeah I’m concerned about it,” he said. “You can look at so many factors here that you have to worry about. Obviously, if you get into a trade war with China, sooner or later, I think we’re going to have to come to grips with that, maybe it’s better to do it sooner…”

It sounds like Icahn may be counseling the president that it’s in everyone’s best interest to deal with the glaring “dangers” posed by the financial markets to both the economy and to Trump’s presidency “sooner” rather than later. For these reasons, I wouldn’t be surprised to see the administration make, in Spitznagel's words, ‘encouraging asset prices and investments to correct themselves’ its first order of business after the inauguration today.