Dec

8

Trumponomics, from Ralph Vince

December 8, 2016 |

 We must ascribe to President Trump that which is his contribution and that which is not. Employment has been accelerating the past two months, the yield curve has steepened, and warnings (on the s&p500) are up 1.6% since late Aug.

Is that Trump or Obama who deserves credit. Nevertheless, 50 bln is 30 bps bump in God, before accounting for the fact that is is 100 bln effect (it is akin to an export towards GDP, while 50 bln in goods need not be shipped), 50,000 jobs, and the multiplier effect on the above. So let's call it a solid 30 bps to GDP, not a bad day's work for any President.

I measure employment from eight different, what I believe to be non-redundant sources, so as to flesh out a fuller, clearer picture than if I relied on only the monthly number, or weekly jobless, though I do incorporate those 2 as part of the 8. 

I DO show employment not only picking up, but accelerating to the upside now, since late August (along with earnings, steepening 90day-30yr Fed curve) and the other "perfect storm," conditions I saw in pace for the beginning of the bull run of the century, which I have every reason to believe, barring human craziness, we are now in the very early throes of (and as I said on another list, a simple amex floor p&f chart gives a dow minimum count on the current run to 20,500). But I think this is the beginning of a multi-decade bull run that will go far beyond what anyone imagines - in equities in gdp, in employment, and in lower rates (yes, rates continuing the relentless, long-term decline amid skyrocketing asset prices).

None of this can be attributed to Trump, the conditions existed before Trump, regardless of who was elected (and I don't really care who is elected, I care about making money). However, if we dissect the numbers of what is happening, as I pointed out, something like the Softbank announcement yesterday is worth 30-60 bps bump in GDP — that would be attributable to Trump. A 15% corp tax rate, and the 300-600 billion that would bring in (read about 1.75-3.5 % bump in GDP) not to mention the multiplier effect, jobs created, etc.

I think political ideology can cloud our thinking and obfuscate opportunity oftentimes. I didn't care for Reagan (1986 amnesty, creating the atrocity we now contend with today, doing away with privacy in banking, bearer bonds, etc, war on drugs, violating checks and balances with Nicaragua, and worst of all, in my book, not putting the total kibosh on the Chrysler bailout, which I said then was a very bad precedent, proven in 08-09) and there are things about Trump I don't like, but all politics aside, this is 1982 on steroids now.


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