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President-Elect Trump: Why Did It Happen? What Does It Mean For Markets?
#1
https://app.hedgeye.com/insights/55423-p...for-market


Quote:Recent moves in the market have been as surprising and disorienting as the election of Trump itself. For what it’s worth, here is my take.
  
Miraculously, a Trump victory has accomplished what central banks around the world have been laboring to accomplish for the last two or three years--persuade the world to believe that inflation is on the up and up. This persuasion in turn gives monetary policy traction again—by making nominal interest rates more deeply negative in “real” terms. In lockstep, fixed-rate sovereign debt (along with equity look-alikes) has tanked. Has the so-called fiscal cure arrived? Paul Krugman is sputtering with indignation that this uncouth right-wing charlatan has stolen all of this progressive thunder...



https://app.hedgeye.com/insights/55423-p...for-market
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#2
(11-20-2016, 10:57 PM)Dan Wrote: https://app.hedgeye.com/insights/55423-p...for-market


Quote:Recent moves in the market have been as surprising and disorienting as the election of Trump itself. For what it’s worth, here is my take.
  
Miraculously, a Trump victory has accomplished what central banks around the world have been laboring to accomplish for the last two or three years--persuade the world to believe that inflation is on the up and up. This persuasion in turn gives monetary policy traction again—by making nominal interest rates more deeply negative in “real” terms. In lockstep, fixed-rate sovereign debt (along with equity look-alikes) has tanked. Has the so-called fiscal cure arrived? Paul Krugman is sputtering with indignation that this uncouth right-wing charlatan has stolen all of this progressive thunder...

https://app.hedgeye.com/insights/55423-p...for-market

Until the Congressional side and the Presidential side agree to massive spending, I'm not holding my breath.  In short, the market could go south fast if the Ryan House decides to move in a totally different direction, as he has said he will.
Intelligence is not knowledge and knowledge is not wisdom, but they all play well together.
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#3
(11-26-2016, 09:38 AM)David Horn Wrote:
(11-20-2016, 10:57 PM)Dan Wrote: https://app.hedgeye.com/insights/55423-p...for-market


Quote:Recent moves in the market have been as surprising and disorienting as the election of Trump itself. For what it’s worth, here is my take.
  
Miraculously, a Trump victory has accomplished what central banks around the world have been laboring to accomplish for the last two or three years--persuade the world to believe that inflation is on the up and up. This persuasion in turn gives monetary policy traction again—by making nominal interest rates more deeply negative in “real” terms. In lockstep, fixed-rate sovereign debt (along with equity look-alikes) has tanked. Has the so-called fiscal cure arrived? Paul Krugman is sputtering with indignation that this uncouth right-wing charlatan has stolen all of this progressive thunder...

https://app.hedgeye.com/insights/55423-p...for-market

Until the Congressional side and the Presidential side agree to massive spending, I'm not holding my breath.  In short, the market could go south fast if the Ryan House decides to move in a totally different direction, as he has said he will.

It might all depend upon Democrats getting control of the Presidency and both Houses of Congress to get the job-creating infrastructure projects that get America out of a a very nasty recession. But that won't be until at least 2020.
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist  but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.


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#4
Since tax cuts on the rich always fuel speculation, the DJIA will go up sharply in 2017 and 2018 - and then into the ionosphere in 2019 if the Republicans get a filibuster-proof majority in the Senate in 2018 and replace the income tax with a national sales tax.

Then the ensuing crash will be really, really catastrophic.
"It was better with them that were slain by the sword, than with them that died with hunger, for these pined away being consumed for want of the fruits of the earth" - Lamentations 4:9
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#5
(01-30-2017, 03:19 PM)X_4AD_84 Wrote: Bad day in the markets today.

Markets don't like it when governments interfere with movements of people and goods.

My take, from my comment on 538; perhaps I'll get some interesting responses here:

Business success and stock prices do not move in perfect unison.

Some of Trump's economic policies are neutral to mildly bad for business - less immigration, potentially tariffs - but they are by far outweighed by the positives - tax reform, regulatory relief, possible trade agreement renegotiation to favor American businesses. So on balance, Trump policies are beneficial to business.

However, stock prices aren't just dependent on business success. They are also dependent on long term interest rates. The lower the interest rates, the higher the price to earnings - P/E - ratio, and thus the higher the stock prices. In recent years, inflation rates and long term interest rates have been kept extremely - perhaps artificially - low, resulting in inflated stock prices.

Trump's economic policies are on balance inflationary. Tax reform is deflationary, but tariffs, immigration control, and "infrastructure" spending are all inflationary. This is likely to push long term interest rates up, since long term interest rates tend to reflect inflation rates.

This is actually fine for the economy - our problem is more that inflation is too low than that it is too high, and higher inflation also leverages the benefit the US gets from high overseas dollar reserves - but it will decrease P/E ratios and stock prices. So we should expect stock prices to fall over the next decade or so, assuming Trump's economic plan isn't greatly modified.

I would argue this is actually a good thing. Today's economy is tilted too far towards those who control the capital, which include stockholders, and too far against the workers who earn wages. Righting the ship involves restoring a larger share of the economy to the wage earners, which necessarily means reducing the share devoted to the capital owners.

And for capital owners who object, just remember the alternative is let the imbalance continue and get worse, which means that at some point, the workers will react even more violently than by doing something like electing Trump, perhaps taking "burn it down" literally. If there's a literal anticapitalist revolution, stockholders will lose everything. Even if there's just enough backlash to elect a Sanders and hand control of Congress to socialists - because it will be socialists, not neoliberal Democrats - capital owners stand to lose a lot more than a bit of stock value.
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#6
(01-30-2017, 11:09 PM)Warren Dew Wrote: Some of Trump's economic policies are neutral to mildly bad for business - less immigration, potentially tariffs - but they are by far outweighed by the positives - tax reform, regulatory relief, possible trade agreement renegotiation to favor American businesses. So on balance, Trump policies are beneficial to business.

None of these can be assigned a net positive or negative value.  Tax reform is still an unknown, since it originates in the House but must pass muster in the Senate.  Trade agreements will be messy and long in arriving, so they will have virtually no impact during this Presidency.

Warren Dew Wrote:However, stock prices aren't just dependent on business success. They are also dependent on long term interest rates. The lower the interest rates, the higher the price to earnings - P/E - ratio, and thus the higher the stock prices. In recent years, inflation rates and long term interest rates have been kept extremely - perhaps artificially - low, resulting in inflated stock prices.

Interest rates are driven by inflation.  So higher rates tend to be driven by a more active economy.  You noted the lack of inflation, but not the cause.  It's lack of demand, because the consumers are not as well paid as they were, and therefore not able to buy nearly as much.  I don't see Trump moving that at all.

Warren Dew Wrote:Trump's economic policies are on balance inflationary. Tax reform is deflationary, but tariffs, immigration control, and "infrastructure" spending are all inflationary. This is likely to push long term interest rates up, since long term interest rates tend to reflect inflation rates.

Tax reform is almost certainly inflationary, since tax cuts, if they actually happen, will not be matched by spending cuts.

Warren Dew Wrote:This is actually fine for the economy - our problem is more that inflation is too low than that it is too high, and higher inflation also leverages the benefit the US gets from high overseas dollar reserves - but it will decrease P/E ratios and stock prices. So we should expect stock prices to fall over the next decade or so, assuming Trump's economic plan isn't greatly modified.

If we get tax cuts and massive infrastructure spending, inflation will rise quickly.

Warren Dew Wrote:I would argue this is actually a good thing. Today's economy is tilted too far towards those who control the capital, which include stockholders, and too far against the workers who earn wages. Righting the ship involves restoring a larger share of the economy to the wage earners, which necessarily means reducing the share devoted to the capital owners.

Why do you think Trump, an active capitalist himself, will work to push up wages?

Warren Dew Wrote:And for capital owners who object, just remember the alternative is let the imbalance continue and get worse, which means that at some point, the workers will react even more violently than by doing something like electing Trump, perhaps taking "burn it down" literally. If there's a literal anticapitalist revolution, stockholders will lose everything. Even if there's just enough backlash to elect a Sanders and hand control of Congress to socialists - because it will be socialists, not neoliberal Democrats - capital owners stand to lose a lot more than a bit of stock value.

Here we agree.  This may be the last chance for capitalism to be a productive force for all.  I'm not holding my breath, but it may be driven that way out of fear.
Intelligence is not knowledge and knowledge is not wisdom, but they all play well together.
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#7
(01-31-2017, 12:36 PM)X_4AD_84 Wrote: Well, how about that?

The Koch's are stepping up to the plate (again). I don't blame them. They are rightfully concerned about their bottom line:

https://www.yahoo.com/news/koch-network-...25940.html

'Billionaire industrialist Charles Koch is launching a campaign to sink a border tax under consideration by Republican leaders in Congress, a move that could complicate the lawmakers' efforts to find a way to pay for President Donald Trump's proposed wall on the U.S. border with Mexico.'

Here's some brain work for all you Neo-Duginist rocket scientists. Just considering Molex alone, what impact would a 20% tariff on items imported from Mexico have?

Oh, the Koch brothers are doing something to benefit their bottom-line.  Movie at 11.  Rolleyes

Neo-Duginist rocket scientists?  WTF?  There a lot of those around here?  What actually qualifies one as a "Neo-Duginist rocket scientist", as opposed to maybe an "Orthodox Duginist rocket scientist", or a "Limonovist rocket scientist", or what have you?  Your audience on this discussion board is limited to the people reading it, so to whom do you think you're referring?  Spammers?  Fellow posters?  Boris Badenov and Natasha Fatale?

And Molex... the connector company?  Headquarted in Lisle, IL, with a subsidiary in Guadalajara (I looked it up)?  What about 'em?

Do you hate Trump for any reason beyond his apparent unwillingness to allow you to the opportunity to realize your long-running dream of witnessing (however briefly) WWIII?

This is getting a little weird, guy.
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#8
Niall McCarthy ,  

Contributor

Data journalist covering technological, societal and media topics

Opinions expressed by Forbes Contributors are their own.



In the United States, more people were employed in solar power last year than in generating electricity through coal, gas and oil energy combined. According to a new report from the U.S. Department of Energy, solar power employed 43 percent of the Electric Power Generation sector's workforce in 2016, while fossil fuels combined accounted for just 22 percent. It's a welcome statistic for those seeking to refute Donald Trump's assertion that green energy projects are bad news for the American economy.

Just under 374,000 people were employed in solar energy, according to the report, while coal, gas and oil power generation combined had a workforce of slightly more than 187,000. The boom in the country's solar workforce can be attributed to construction work associated with expanding generation capacity. The gulf in employment is growing with net generation from coal falling 53 percent over the last decade. During the same period, electricity generation from natural gas increased 33 percent while solar expanded 5,000 percent.

Fuel production and electricity generation together directly employed 1.9 million workers last year, according to the report, with 55%, or 1.1 million, working with fossil fuels. The DoE identifies another 2.3 million jobs associated with energy transmission, distribution and storage.

Solar energy added 73,615 new jobs to the U.S. economy over the past year while wind added a further 24,650.

[Image: 20170125_Solar-1.jpg?width=960]

http://www.forbes.com/sites/niallmccarth...7fe8c77d27

My comment:

...Note that Donald Trump has heavily promised to push petroleum and coal, energy sources not growing in employment. Pushing a declining or dying industry to save jobs is ultimately futile, and it can hurt an activity likely to create employment and economic growth. .
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist  but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.


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#9
I am a huge fan of expanding investment in things like alternative energy, but the above link deserves some context.

US Primary Energy Consumption by Source and Sector 2015:

[Image: consumption-by-source-and-sector-2015.jpg]

So, 79.4% from fossi fuels vs 9.7% from renewables, about half of which comes from hydroelectric.

Even looking purely at electricity, we're still talking about over 60% from fossil fuels.

[Image: SNL-Energys-latest-coal-forecast-April-2...entage.jpg]

So let's cheer on the growth of solar, by all means, but try to keep it in perspective as well.  We're a long way from being 100% renewables, and without effective grid-scale storage, we won't get there at all.
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#10
(01-31-2017, 10:28 PM)SomeGuy Wrote: I am a huge fan of expanding investment in things like alternative energy, but the above link deserves some context.

US Primary Energy Consumption by Source and Sector 2015:

[Image: consumption-by-source-and-sector-2015.jpg]

So, 79.4% from fossi fuels vs 9.7% from renewables, about half of which comes from hydroelectric.

Even looking purely at electricity, we're still talking about over 60% from fossil fuels.

[Image: SNL-Energys-latest-coal-forecast-April-2...entage.jpg]

So let's cheer on the growth of solar, by all means, but try to keep it in perspective as well.  We're a long way from being 100% renewables, and without effective grid-scale storage, we won't get there at all.
OK, why does it take some many people in wind and solar to create so little fuel or electricity?
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#11
(07-19-2018, 01:12 PM)JDG 66 Wrote: OK, why does it take some many people in wind and solar to create so little fuel or electricity?

It takes an army to build the infrastructure and a platoon to run it once it's done.
Intelligence is not knowledge and knowledge is not wisdom, but they all play well together.
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#12
(07-19-2018, 02:33 PM)David Horn Wrote:
(07-19-2018, 01:12 PM)JDG 66 Wrote: OK, why does it take some many people in wind and solar to create so little fuel or electricity?

It takes an army to build the infrastructure and a platoon to run it once it's done.

...and those will be well-paying jobs capable of supporting middle-income families.
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist  but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.


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#13
(07-19-2018, 02:33 PM)David Horn Wrote:
(07-19-2018, 01:12 PM)JDG 66 Wrote: OK, why does it take some many people in wind and solar to create so little fuel or electricity?

It takes an army to build the infrastructure and a platoon to run it once it's done.

...doesn't explain why it creates so little energy after 40+ years...
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#14
(07-19-2018, 11:41 PM)pbrower2a Wrote:
(07-19-2018, 02:33 PM)David Horn Wrote:
(07-19-2018, 01:12 PM)JDG 66 Wrote: OK, why does it take some many people in wind and solar to create so little fuel or electricity?

It takes an army to build the infrastructure and a platoon to run it once it's done.

...and those will be well-paying jobs capable of supporting middle-income families.

-Hardy, har, har. Last time I checked, Germany's electricity comes from Polish coal. Big Grin
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#15
(07-25-2018, 01:54 PM)JDG 66 Wrote:
(07-19-2018, 02:33 PM)David Horn Wrote:
(07-19-2018, 01:12 PM)JDG 66 Wrote: OK, why does it take some many people in wind and solar to create so little fuel or electricity?

It takes an army to build the infrastructure and a platoon to run it once it's done.

...doesn't explain why it creates so little energy after 40+ years...

Resistance by fossil fuel barons and libertarian economics believers in The West, especially the USA. Developing countries not up to speed on high tech trying to imitate The West.

And yes it takes a while to build it. Without government support, new industries requiring lots of investment often do not succeed.
"I close my eyes, and I can see a better day" -- Justin Bieber

Keep the spirit alive;
Eric M
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