Mr. Trump rather unfortunately may find that his chief task will not be the management of this Great Re-orientation, but more prosaically, fending off the headwinds which he will face as he hauls on the tiller of the economy. In short, there is a real prospect that his ambitious economic “remake” may well be prematurely punctured by financial crisis. These headwinds will not be of his making, and for the main part, represent the accumulation of an earlier monetary doctrine which will fetter the President-elect into a small corner from which any chosen exit will carry adverse implications.
European and Asian stocks rose after the early scare from the latest Fukushima quake dissipated, with the global risk on mood spurred by another jump in crude, which was up 1% in early trading, with the commodity complex now enjoying its biggest three-day rally since May, after Nigeria signaled optimism that OPEC will agree a supply-cut deal next week in Vienna. S&P futures are up 0.3%, with the cash index set to open at new record highs.
The Indian government is resorting to increasingly more novel solutions to restock outlets with new, "clean" cash. As the Times of India reports, authorities have cut down the transportation time of cash from printing to the main distribution centers from 21 days to six and by using all modes of transport, including helicopters and Indian Air Force planes, to move the cash quickly.
More of the same this morning as the dollar extended its advance on the still undeteremined Trump reflationary policy measures after Yellen signaled an interest-rate hike could be imminent, while bond yields around the globe rose again, metals declined, European stocks advanced and futures were modestly in the red just shy of all time highs.
What Yellen and Trump don’t understand is that our nation is both debt-disabled and asset-bubble addicted, which requires interest rates to be near zero or the whole ersatz economy will implode. The bond bubble’s collapse will bring Trump to that reality very soon.
Of all the alleged financial experts on Wall Street, only a handful made the prediction that Trump would win the presidential election, and stuck with it: Jeff Gundlach was one of them, making the correct assessment as far back as the January Barron's 2016 Roundtable. And now the time has come for Gundlach to take his victory lap.
“I was very concerned back in 2007. I was very concerned with the consequences of this bubble imploding. I'm much more worried today. In 2007, I wasn't worried about the world. I wasn't worried about geopolitical. And I never want to be part of the lunatic fringe, but if people aren't concerned about geopolitics right now, they're not paying attention"
If the S&P 500 ends the day lower today, it will mark seven straight days of declines. This 'event' has only occurred three other times in the last 20 years... and each coincided with a major financial crisis...
"And so the ECB is stuck, as it has been since 2012, between an unfavourable equilibrium of low growth, high unemployment and zero reform momentum on the one hand, and growing risks to core country balance sheets on the other. It remains to be seen how it will escape from this dilemma of its own making."
From here on out politics are only relevant at the extremes - major war, corruption scandal, martial law etc.Short of that, the fiat currency/fractional reserve banking world has such institutional momentum that it really won’t matter whether Trump is picking on bankers and building his wall or Clinton is protecting Wall Street and raising taxes. Debt will keep soaring as it has under every president since Reagan and jobs will disappear as machines replace people, thus bringing the end of the current system inexorably closer.
In a recent interview with Macro Voices, Hugh Hendry is asked about the trade he has on in his fund, to which the Scotsman says that his team recently had a “eureka moment” and figured out how to design a trade, which has a negative carry when viewed in simple terms, such that they preserve the asymmetric of risk/reward while converting it to a positive-carry trade by adding another “European sovereign component to the trade”.