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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2 Comments so far

  1. Astro the dog on December 8, 2016 12:30 pm

    More like 1929….

    DEC 02, 2016

    President-elect Trump Establishes the President’s Strategic and Policy Forum

    (New York, NY) – President-elect Donald J. Trump today announced that he is establishing the President’s Strategic and Policy Forum. The Forum, which is composed of some of America’s most highly respected and successful business leaders, will be called upon to meet with the President frequently to share their specific experience and knowledge as the President implements his plan to bring back jobs and Make America Great Again. The Forum will be chaired by Stephen A. Schwarzman, Chairman, CEO, and Co-Founder of Blackstone.

    Members of the Forum will be charged with providing their individual views to the President – informed by their unique vantage points in the private sector – on how government policy impacts economic growth, job creation, and productivity. The Forum is designed to provide direct input to the President from many of the best and brightest in the business world in a frank, non-bureaucratic, and non-partisan manner.

    “This forum brings together CEOs and business leaders who know what it takes to create jobs and drive economic growth,” said President-elect Trump. “My administration is committed to drawing on private sector expertise and cutting the government red tape that is holding back our businesses from hiring, innovating, and expanding right here in America.”

    The first meeting of the Forum will be held at The White House during the first week of February.

    ========================================

    The President and the Economy during the Great Depression

    Wikimedia Commons

    When the stock market crashed in October 1929, President Herbert Hoover encouraged business leaders to take an interventionist approach to combat the impending economic emergency because “it is action that counts.”1 Over the next three years, however, Hoover worked unsuccessfully to mitigate the economic crisis of the Great Depression. Corporate welfare promises failed. State relief efforts dissipated. Not only was the federal government too small to handle the crisis, individuals and businesses across the political spectrum opposed federal intervention. Even then-governor of New York, Franklin Roosevelt, wrote privately, “I am very much opposed to the extension of Federal action in most economy social problems.”2

  2. Andre on December 8, 2016 3:45 pm

    But never trust a man who claims he can predict the future.

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