Everything Is Soaring As Trump Makes Buying Stuff Great Again

Tyler Durden's picture

Who would have thought - as recently as two days ago - that a Trump presidency is the best thing for global risk? Certainly not Wall Street experts, all of whom warned of drops as big as 5% should Trump be elected.

And yet, the global repricing of inflation expectations continues at a feverish pace in the aftermath of the Trump victory, leading to another surge in US equity futures, up 15 points or 0.7% to 2175 at last check, with Asian and European stock market all jumping (Nikkei was up a whopping 6.7% after losing 4.6% the day before) after the initial shock of Donald Trump’s election victory gave way to optimism that his plans for fiscal stimulus will provide a boost to the global economy.  Commodity metals soared with copper surging 4.5% to $5,658.50 a metric ton, the biggest gain since May 2013, while zinc advanced 2.1% and nickel added 2%. Gold climbed on speculation whether the Federal Reserve will raise interest rates in December.

The euphoria is largely due to the market's hopes of a burst in fiscal stimulus, aka much more debt, which while self-defeating in the long run, is providing a major boost to risk assets for the short-run, as it puts QE potentially back in the picture: after all someone will be needed to monetize the US budget deficit which is expected to once again soar under president Trump.

As Citi strategists note today, "The outcome of the U.S. election leaves the policy and macroeconomic outlook in the U.S. and globally with major uncertainties. Acknowledging these major uncertainties, we expect the new administration to pursue some deregulation, fiscal expansion, and reassess the costs and benefits of free trade. The combination of policies could be inflationary, quicken the path of Fed hikes and strengthen the dollar."

Indeed, as Bloomberg puts it, Donald Trump’s unlikely rise to power is providing a shot in the arm for global financial markets, with stocks and commodities rallying on optimism that his fiscal-stimulus plans will boost the global economy. European equities joined a global rally as they headed for their biggest four-day jump since July. Banks surged on prospects of lighter regulation for their U.S. operations and higher lending rates, and miners gained on increased metals prices. Copper rose the most in more than three years on Trump’s intention to expand infrastructure spending. Currencies of most commodity-producing nations advanced, while Bloomberg’s dollar index reversed losses. Government bonds in Europe and Asia slid as the inflation outlook lifted, while corporate-debt sales resumed in Europe as markets stabilized.

Those who saw S&P futures trade limit down on Wednesday morning will likely be stunned by the amazing U-turn in global markets since the shock win for Trump triggered a knee-jerk selloff in equities and rush into haven assets. European shares Wednesday staged their biggest turnaround since March as investors took comfort in his acceptance speech. They are starting to look beyond Trump’s campaign rhetoric, focusing instead on his promises to cut taxes and at least double Hilary Clinton’s estimated $275 billion, five-year plan for roads, airports and bridges.

The only asset conspicuously not participating in the global ramp was oil, which was little changed after three days of gains. The IEA said prices may retreat amid “relentless global supply growth” unless the OPEC enacts significant output cuts. West Texas Intermediate fell less than 0.1 percent to $45.25 a barrel and Brent was 0.8 percent higher at $46.71.

“It’s a relief rally of the certainty of the outcome of the election and after the conciliatory tone that Trump took,” said Nick Skiming, a fund manager at Jersey, Channel Islands-based Ashburton Ltd. His firm oversees $10 billion. “We know from Trump’s policies that he wants to reduce taxes and embark on fiscal spending and if he gets those approved, that will be expansionary for the U.S. economy in the short term.”

Europe's Stoxx 600 Index gained 1% as of 10:55 a.m. London time, with lenders reaching their highest levels since March. UBS Group AG soared 7.6%, set for its biggest surge since 2012. Among Trump’s policies were a pledge to repeal the Dodd-Frank Act’s strict capital requirements on banks and a proposed temporary moratorium on new financial regulations. Gains in commodities helped send a gauge of miners to its highest since June. French media company Vivendi SA jumped 10 percent, and Germany’s Siemens AG rose 4.7 percent after they posted profit that beat projections.

S&P 500 Index futures climbed 0.7 percent, indicating U.S. equities will extend their advance into a fourth day. Billionaire Carl Icahn said he left President-elect Trump’s victory party to bet about $1 billion on U.S. equities. The investor said that the economy still faces challenges but Trump will be “a positive, not a negative” for the country. 

The MSCI Asia Pacific Index climbed 2.7 percent, the most since March. Japan’s Topix index jumped 5.8 percent, after sinking 4.6 percent in the last session, and Australia’s benchmark rallied by the most in five years. In Hong Kong, Jiangxi Copper Co., China’s second-largest producer by output, rose 14 percent. Russian aluminum maker United Co. Rusal Plc jumped by the most on record.

While the focus will remain on the unfolding political landscape, investors may also look to data on initial jobless claims and earnings from companies including Macy’s Inc. and Ralph Lauren Corp. for indications of the health of the world’s biggest economy.

But while stocks soared, it was a different story in bond markets: European debt fell after about $337 billion was wiped off bond markets on Wednesday as Trump’s election sparked concern that his plan to boost economic growth will lead to a surge in inflation. The yield on German 10-year bonds climbed seven basis points to to 0.27 percent, while that on similar-maturity U.K. gilts added seven basis points to 1.33 percent. Ten-year U.S. Treasury yields rose two basis points to 2.07 percent. The U.S. is selling $15 billion of 30-year Treasuries at an auction on Thursday. Bonds of that maturity led Wednesday’s selloff, with yields climbing 23 basis points.

“Trumpeconomics implies a likely faster pace of Fed rate hikes next year,” said Robert Rennie, head of financial markets strategy at Westpac Banking Corp. in Sydney. “It is clear that this wave of populist vote has reflected, in part, dislike of tight fiscal, easy monetary policy. If we are now seeing a shift in the U.S., then that means markets will have to reprice this.”

Odds for a Fed interest-rate hike in December climbed to 88 percent, based on U.S. overnight indexed swaps that trade 24 hours a day, after plunging below 50 percent while the outcome of the election unfolded. San Francisco Fed President John Williams said Wednesday that the argument for gradual interest-rate increases “still makes sense to me.”

Bulletin Headline Summary from RanSquawk

  • European equities follow suit from their US and Asian counterparts to trade higher across the board with financials and materials leading the way
  • The US 10yr has tipped 2%, and this has added fresh fuel to the USD/JPY rise which has now pushed through 106.00
  • Looking ahead, highlights include US weekly jobless data as well as comments from Fed's Williams and Bullard, ECB's Constancio and Mersch and BoE's Haldane

Market Snapshot

  • S&P 500 futures up 0.7% to 2175
  • Stoxx 600 up 1.1% to 344
  • FTSE 100 up 1% to 6980
  • DAX up 1.1% to 10764
  • German 10Yr yield up 5bps to 0.25%
  • Italian 10Yr yield up 4bps to 1.79%
  • Spanish 10Yr yield up 3bps to 1.31%
  • S&P GSCI Index up 0.9% to 359.9
  • MSCI Asia Pacific up 2.7% to 137
  • Nikkei 225 up 6.7% to 17344
  • Hang Seng up 1.9% to 22839
  • Shanghai Composite up 1.4% to 3171
  • S&P/ASX 200 up 3.3% to 5329
  • US 10-yr yield down 1bp to 2.04%
  • Dollar Index up 0.4% to 98.9
  • WTI Crude futures down 0.4% to $45.11
  • Brent Futures up 0.3% to $46.51
  • Gold spot up 0.2% to $1,280
  • Silver spot up 1.3% to $18.72

Global Headline News

  • Trump Starts New Political Era as Republicans Claim Mandate: Ryan says Republican unity will drive new agenda for nation
  • Investors Lose $337b as Bonds Whipsawed on Trump Victory: Trump victory means bigger chance of Fed hike, Westpac says
  • Stock Forecasters No Better Than Pollsters in Figuring Out Trump: rather than plunge, American equities stage an epic turnaround
  • Iranian Nuclear Deal Faces New Twist With Trump Win
  • Oil Output Surge Piles Pressure on OPEC as IEA Warns on Price: market faces ‘relentless’ supply growth as non-OPEC recovers
  • AstraZeneca Sales Miss Estimates on Slower Growth in New Drugs: without tax benefit, profit was 96 cents vs. 98-cent estimate
  • Vivendi Soars After Profit Beats Estimates With Music Strength: adjusted net income almost doubled in 3Q
  • Blackstone, KKR Said to Ready Bid Financing for Valeant’s iNova: sale may fetch about A$1b, according to people familiar
  • Goldman Sachs Names 84 New Partners, Most Since 2010 Class: traders make up largest group, followed by investment bankers
  • VW Accused of Concealing Emissions Cheating in Audi Gas Cars: Owners of 100,000 Audi vehicles file class-action lawsuit

* * *

Looking at regional markets, we start in Asia where the fallout from the 2016 Presidential Election results is still dictating the state of play in markets. Asian indices traded higher across the board benefiting from the bullish close on wall Street with the three majors closing the session at highs and in the Dow's case ATH's. The Nikkei 225 (+6.7%) lead the way higher, with financials outperforming as Donald Trump is seen as more friendly to the banking sector, given his previous commentary and his record of amassing a large property portfolio through debt. The Republican 'clean sweep' of House, Senate and President has also reassured global stock markets. Japanese Finance Minister Aso said he wants to avoid FX intervention and the government will not intervene in FX except in exceptional cases.  PBoC set the CNY reference at 6.7885 (Prey. 6.7832) — the weakest setting since 2010 and injected CNY 80bIn in 7y and 14y reverse repos.

Asian Top News

  • Asian Shares Jump With Metals as Trump Reassessed; Kiwi Weakens: Stock gains led by raw-materials producers as copper jumps
  • McDermott Says RBNZ Worried About Kiwi, Will Cut Rates If Needed: “We have not reached the floor” on rates, assistant governor says
  • Mr. Yen Says Trump Victory Doesn’t Change Currency-Market Trend: Yen may strengthen to 90 per dollar within six months of Donald Trump’s election, Eisuke Sakakibara says
  • Tata Consultancy Says Ishaat Hussain Nominated As Chairman: Hussain shall hold office until new chairman is appointed
  • Modi May Reap $45 Billion Budget Boost With Anti-Graft Cash Ban: Edelweiss Securities predicts crack down on high-value currency notes will uncover 3t rupees in black money
  • Singapore Names Jho Low Person of Interest in 1MDB-Linked Probe: Country’s investigation into Low started in 2015
  • Hyundai Merchant, Korea Line Submit Final Hanjin Asset Bids: preferred bidder to be picked on Nov. 14, court says

Likewise in Europe, Donald Trump continues to dictate price action across asset classes, with equities continuing to strengthen, as was seen in the second half of yesterday's trade. European bourses all trade higher this morning by over 1%, with material and financials leading the way higher benefitting from speculation regarding what a Trump presidency could entail, while utilities underperform in the wake of earnings reports from Engie and National Grid. Elsewhere, fixed income markets have seen European paper follow their US counterparts, with Bunds retaking the 161.00 handle to the upside as markets calm in the wake of yesterday's volatility. Analysts at Informa note that Spanish/Italian 10 year yields have climbed 3-4bps as the Renzi/EU row continues to escalate, amidst more animosity vs EC in campaigning ahead of the Dec 4 referendum.

Top European News

  • Trump Victory Hands U.K.’s May Security Leverage in Brexit Talks: British military capability may be in more demand in Europe
  • Deutsche Bank Sees Mideast Deal Revival After ‘Subdued’ 2016: regional head says low oil price will drive consolidation
  • Siemens Plans to Spin Off Health Unit as CEO Sharpens Focus: company has announced no timeline or scope for spinoff
  • Zurich Insurance 3Q Profit Soars on Lower Claims: lack of major natural disasters helps insurer boost earnings
  • Deutsche Telekom Earnings Rise as U.S. Business Wins Users: German carrier betting on U.S. to offset slower European sales
  • Aegon Jumps as Investments Help It Return to Quarterly Profit: stock rises most in more than 7 years
  • Continental Sees Car-Industry Currency Turmoil on Trump Election: CFO predicts peso, yen shifts on U.S. trade-policy questions
  • Electrolux to Buy South African Water-Heater Producer Kwikot: transaction has enterprise value of $237 million
  • K+S Narrows 2016 Earnings Target Range on Output Concerns: sees Ebitda of up to EU560m
  • Puma Raises Outlook as Rihanna, Celebrity Tie-Ups Help Sales: sees Ebit in upper part of EU115m-EU125m range
  • Arkema’s Raises Full-Year Earnings Outlook On Boost From Bostik: sees synergies from acquisition of Den Braven
  • Generali 9M Profit Falls on Lower Investment Income: 9M profit fell 5.9% as low interest rates and volatile equity markets hurt investment gains

In commodities, industrial metals rose as Goldman Sachs Group Inc. said Trump’s promise to revive American infrastructure means commodities used to build everything from airports to bridges will benefit under his presidency. Copper surged 4.5 percent to $5,658.50 a metric ton, the biggest gain since May 2013, while zinc advanced 2.1 percent and nickel added 2 percent. Gold climbed as traders speculated on whether the Federal Reserve will raise interest rates when policy makers meet next month. Bullion rose 0.2 percent to $1,279.85 an ounce and silver gained 1.4 percent. Oil was little changed after three days of gains. The International Energy Agency said prices may retreat amid “relentless global supply growth” unless the Organization of Petroleum Exporting Countries enacts significant output cuts. West Texas Intermediate fell less than 0.1 percent to $45.25 a barrel and Brent was 0.8 percent higher at $46.71.

In currencies, the Bloomberg Dollar Spot Index reversed losses to advance 0.3 percent, after rallying 1.4 percent on Wednesday. Currencies of commodity-producing nations were the best performers in foreign-exchange markets, with Australia’s dollar surging 1.3 percent and Norway’s krone appreciating 0.6 percent. Russia’s ruble strengthened 0.5 percent, leading gains among currencies in developing economies as investors speculated Trump will mend ties with Moscow. That could improve the outlook for loosening sanctions imposed after Russia’s annexation of Crimea in 2014. “A Trump presidency is dollar bullish because Trump’s economic policies are inflationary and will force the Fed to raise the Funds rate at a faster pace than otherwise,” said Elias Haddad, a senior currency strategist at Commonwealth Bank of Australia. Mexico’s peso was 0.1 percent weaker after sinking 7.7 percent on Wednesday. Trump has pledged to renegotiate the North American Free Trade Agreement and curb illegal immigration by building a wall along the U.S.’s southern border. The yuan slipped to a six-year low amid concern Chinese exports will also suffer. Trump has called China a “grand master” at currency manipulation and has threatened tariffs of up to 45 percent on imports from the Asian nation, a step that Commonwealth Bank of Australia estimated would cut Chinese shipments to the the U.S. by 25 percent in the first year.

On today's calendar, one event worth highlighting though and which could be interesting now is the scheduled 30y Treasury auction this evening. In the midst of the hugely volatile moves yesterday, the 10y auction was reported as the weakest, based on the bid to cover ratio of 2.22, since March 2009. So it’ll be interesting to see how much demand there is for longer dated debt today. Away from that, the data docket today contains France wage data and IP this morning followed by initial jobless claims and the October Monthly Budget Statement across the pond this afternoon. The Fed’s Bullard and Lacker will also speak today.

US Event Calendar

  • 8:30am: Initial Jobless Claims, Nov. 5, est. 260k (prior 265k)
  • 9:15am: Fed’s Bullard speaks in St. Louis
  • 9:45am: Bloomberg Consumer Comfort, Nov. 6 (prior 44.6)
  • 10am: Freddie Mac mortgage rates
  • 10:30am: EIA natural-gas storage change
  • 12:45pm: Fed’s Lacker Speaks in Richmond
  • 2pm: Monthly Budget Statement y/y, Oct., est. -$70b (prior - $136.6b)

DB's Jim Reid concludes the overnight wrap

To expand further on what I was discussing in yesterday's EMR after Trump and the Republican's clean electoral sweep, I must say that this is the most positive I've felt on the medium-term prospects for US growth for perhaps a decade. As a 'secular stagnationist' this is as much a relative and a nominal GDP story as it is an absolute and real GDP view but at least we'll likely to see a change in policy. Policy should now be skewed towards reflation at a fiscal level. However as a caveat the outcome is probably also potentially dangerous for growth as a Trump presidency has more risk of going spectacularly wrong than most others given his inconsistent approach to policy in the lead up to the election and his total lack of political experience. There was a great quote on Bloomberg last night from Sarah Binder - a political science professor at George Washington University - who said that "In every conversation I have about a President Trump there is an asterisk of unpredictability". This certainly rings true.

There are still some doubts as to whether he has his party fully behind him although the clean sweep may mean Republicans are happy to loosen the purse strings now they are in full control (and can get the credit) regardless of any doubts over Trump. The other problem with Trump are his international views (migration, trade) and we stand by our September long-term study view that Globalisation is going to be in full retreat over the years ahead which has longer-term global growth and stability risks. The link to "An Ever Changing World" where we articulated our view of the turn in the super cycle meaning higher yields, higher inflation, more fiscal spending and less globalisation is at the end of today's piece. Back to Trump, he also has non-economic policies that could be divisive if he follows through on his campaign rhetoric. So a leap into the unknown in some respects.

However if your view has been that constant monetary easing without support from fiscal policy was becoming counterproductive at a global level, then you have to take Trump and the Republicans seriously whatever your view(s) on him/them. I would stress that Trump will likely need the Fed over the years ahead though and he's not been their biggest fan. A persistent unfunded fiscal deficit could push yields up to levels that the debt ladened global economy would find overly negative. For expansionary fiscal policy to work in a world of heavy debt I do think you need a central bank willing or forced to buy government bonds. If not what's the incentive for the bond market to buy into an unfunded reflation boost. So we could see a strange situation in 2017 where the US is pursuing big expansionary fiscal policy but with no QE whereas Europe will continue to do big QE but without notable fiscal expansion. So yesterday's 20.2bp sell-off in 10 year Treasuries (a stunning 34.6bps from the Asian session lows) is one to watch and could be something the Republican's need to bare in mind if they go for broke on stimulus. What the Fed looks like in 18 months is also a big question. The Republicans and Trump have been very keen to clip their wings and the spectre of them becoming less independent - perhaps after Yellen's term ends in 2018 - must surely be a possibility.

Anyway we are writing our 2017 outlook at the moment and obviously this result is making us stress test our views for the next year or so. Any thoughts welcome from our readers on what this victory means. We reserve the right to change our mind on things by the time the outlook is out but this certainly shakes things up for 2017!

We discussed yesterday that we thought the result would initially bring risk-off followed by a reversal as the positive fiscal prospects would come into view. I'm not sure we thought such a turnaround would happen in hours rather than days or weeks but the low/high range yesterday was astonishing for a number of assets. Trump's conciliatory acceptance speech was probably the main catalyst. Let’s start with the aforementioned move for Treasuries where the high-to-low move was actually an incredible 37.4bps at the 10y and which took the yield back above 2% (closing at 2.057%) for the first time since January. That daily range is the highest since August 2011 although if we look at the magnitude of the selloff in percentage terms (10.91%) then it is actually the second highest with data going back to 1966. In another eye-watering stat, yesterday’s high to low range in basis points was 20bps more than the daily high-to-low range for the whole of the month of August. Volatility at its finest.

Staying with rates, the Treasury curve steepened aggressively with the 2y30y spread widening 19.5bps to 195bps with that one day move the biggest since 2011. The probability of a December Fed rate hike at one stage plummeted below 50% during Asia time before bouncing back and making an almost complete u-turn to close at 82%. In Europe the moves for sovereign bond markets, while still weaker, were slightly less spectacular. 10y Bund yields hit an intraday low of 0.090% in the early showing before closing at their highs in yield at around 0.200%. That was a 1.5bp move higher on the day, but a high-to-low range of 11bps.

Over in equity markets the incredible turnaround was more evident in the US futures market given Trump fears peaked early in the Asia session. Dow futures swung in a 1,172 point range after initially plummeting 867 points before then swinging to a 305 point gain. That’s the equivalent of a 6.82% high to low range. In the cash market the Dow closed up +1.40% after being down as much as half a percent initially. The high-to-low was 2.18%. The S&P 500 closed +1.11% with a high-to-low of 2.10% but this was -5% and limit down in Asian trading. Sector wise, the prospect of looser regulation meant financials (+4.07%) and healthcare (+3.43%) were the big outperformers. In fact, the Nasdaq Biotech index rallied +8.98% for its biggest once day gain since 2008. There’s going to be huge focus on the healthcare sector now given Trump’s vocal opposition of Obamacare and our US equity strategists are calling for +20% upside for the sector. Meanwhile the VIX tumbled just over 23% and back below 15, with a high-to-low range of 33%. Over in Europe the Stoxx 600 closed +1.46%, again however with a remarkable 3.91% range.

Credit was much the same. In the US CDX IG finished 1.3bps tighter on the day but in a near 6bp range. HY was even more impressive with the CDX HY spread 5bps tighter by the close but the high-to-low a spectacular 28bps. In Europe indices ended little changed with Main swinging in a 5bps range Xover swinging in a 20bp range.

The other markets to highlight were commodities and currencies. Gold, having smashed through $1300/oz and trading as high as +4.73% early on, closed just +0.18% but with a range of 5.45%. WTI Oil finished +0.64% but in Dollar terms swung in a $3/bbl range. Finally in currency markets the standout was the Mexican Peso which at one stage was -13.37% weaker, before paring losses to ‘just’ -8.30%. The Swiss Franc finished -0.67% weaker with a range of a little over 3% while the Yen was -0.48% on the day in a range nearing 5%.

So if that hasn’t caused your eyes to bulge just yet, then this morning we’re seeing a similar rebound across markets in Asia. The Nikkei (+5.86%) has more than recovered Wednesday’s losses while the Hang Seng (+1.92%), Shanghai Comp (+1.14%), Kospi (+1.70%) and ASX (+2.81%) have all surged back. Credit markets have made a similar turnaround while US equity index futures are little changed in the early going. In commodity markets the surge in metals has stood out with Copper, Zinc and Aluminium up between 3% and 5%. Iron ore is also above $70/tn for the first time since April. Needless to say miners have had a very strong morning. The infrastructure story is kicking in. Elsewhere the San Francisco Fed’s Williams opined overnight that a gradual rate of rate increases still makes sense, a view that is unchanged post election.

Meanwhile, away from the market moves, the remaining newsflow has been largely consigned to watching the political response globally. With trade negotiations at the forefront of debate now, Canada Ambassador David MacNaughton said that Canada is willing to entertain reopening the NAFTA agreement to potential changes should the President-elect want to. The Ambassador also suggested that he expects bilateral trade between the two countries to remain strong. Meanwhile Mexico President Enrique Pena Nieto said that ‘this election opens a new chapter in relations between Mexico and the US that will imply a change, a challenge but also a big opportunity’.

Unsurprisingly though it was the global populist movements that rejoiced in Trump’s victory. In France the leader of the right-wing National Front party, Marine Le Pen, said that ‘French people who hold this freedom so dearly will find an extra reason to break with a system that shackles them’. The founder of the populist 5SM in Italy also highlighted similarities between the result and movements in Italy. Austrian Freedom Party leader Heinz-Christian Strache was similarly jubilant while Russia President Putin said that ‘Russia is ready and wants to restore fully fledged relations with the US’ and that ‘this would serve the interests of the Russian and American peoples, as well as positively impacting the general climate in international affairs’.

Wrapping up yesterday, it would be an understatement to say that the data played second fiddle yesterday but for completeness, in the US we learned that wholesale inventories rose a slightly less than expected +0.1% mom (vs.+0.2% expected) in September. Wholesale trade sales also rose less than expected (+0.2% mom vs. +0.5% expected) while the Atlanta Fed held their Q4 GDP forecast at 3.1% following that data. In Europe the Bank of France business sentiment reading for October was unchanged at 99. Finally in the UK the trade balance widened further in September. The European Commission also released their latest economic forecasts, cutting Euro area growth expectations to 1.5% in 2017 from the earlier 1.8% forecast.

So while today’s diary does contain some economic reports, the likelihood is that markets will continue to respond to the Election result. One event worth highlighting though and which could be interesting now is the scheduled 30y Treasury auction this evening. In the midst of the hugely volatile moves yesterday, the 10y auction was reported as the weakest, based on the bid to cover ratio of 2.22, since March 2009. So it’ll be interesting to see how much demand there is for longer dated debt today. Away from that, the data docket today contains France wage data and IP this morning followed by initial jobless claims and the October Monthly Budget Statement across the pond this afternoon. The Fed’s Bullard and Lacker will also speak today.

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Chuck DeBongo's picture

Meet the new boss, same as the old one.

More stimulus, more debt, more false economy.

What the hell is going on?!

ali_baba's picture

Well, at least he doesnt hide his jewishness. He aint no crypto that's for sure.

http://www.dailymail.co.uk/news/article-3571403/Trump-insists-Israel-bui...

 

 

Escrava Isaura's picture

Fiscal Stimulus?

Isn’t that the opposite what Trump said?

 

nmewn's picture

Think he also said something about tax cuts, is that not also a fiscal stimulus?

Escrava Isaura's picture

Wrong.

To be a stimulus it has to be new money.

It cannot be bonds, savings, or tax-cuts.

 

SoilMyselfRotten's picture

Trumps' vote lead did make it initially dip soooo....BTFTD

Escrava Isaura's picture

Correct. Buy it from here to eternity.

Well, until we lose the battle to (run out of) oil.

 

MillionDollarBonus_'s picture

Yellen needs to teach Trump a lesson by raising interest rates! Trump is not my President, and progressives will never accept him! I’m seriously considering moving to Canada!

WHY OBAMA NEEDS TO ACT NOW AGAINST RUSSIA
BabaLooey's picture

Move McFuckstain.

And get new writers.

Your shit's becoming unglued.

Maybe you need to get off the glue.

Whoa Dammit's picture

Funny how all of these so called protestors that turned out last night didn't bother to show up for any Hillary rallys. I think I smell some paid for rats that are causing the protests.

Holy hand grenade of Antioch's picture
Holy hand grenade of Antioch (not verified) Whoa Dammit Nov 10, 2016 8:37 AM

Trump protesters breaking windows ~ It's a Krugman wonderland!

SoilMyselfRotten's picture

Have to keep up on your ZH articles MDB, Canada doesn't want you

VinceFostersGhost's picture

 

 

BOOYAH......no more healthcare fine!!!

 

I'm gonna to go out and buy some stuff.

Chris Dakota's picture
Chris Dakota (not verified) silverer Nov 10, 2016 9:07 AM

Today Trump meets with Obama.

I recall the White House correspondents dinner  2011 when Obama publicly humiliated Donald Trump  in front of the Washington elites.

Wonder how that meeting goes today, this is not forgotten you can be sure. The black woman is a longtime Trump insider got her start with him on the Apprentice TV show, she was outreach to black community during the campaign and will have a role in his administration.

Watch it happen here: from beginning to 5:52

https://www.youtube.com/watch?v=s7uScWHcTzk

Inevitability's picture

It's a little early for me to be laughing so hard. Way to brighten up my day MDB_!

 

Oh and for all those salty HRC supporters who are still in stunned denial.

 

Trump IS your President. Hedge accordingly.

LadiesLoveCoolJames's picture

I voted for the meteor. Don't blame me. Can we just get on with the reset already before President Camacho has to do any actual leading? Pretty please?

froze25's picture

This is very simple,  the producers of the US have a man going into the white house that they believe is actually for their intrest. They, myself included have been in a depression for the last 9 years and see a ray of light on the horizon.  The people that work are excited. I hope it turns out well. 

PT's picture

Trump on Oprah in 1988:

https://www.youtube.com/watch?v=GZpMJeynBeg

Replace "Japan" with "China" and he could have said it yesterday.

scm's picture

Hurry up and buy shit before thump slaps his 35% tarriff (TAX) on everything.

Bill of Rights's picture

Fuck off already, sick and tired of the end iS near, its been ending for  years...GROW UP! or go live in your cave

GoldLion's picture

When people know they'll have more money in their pocket due to a tax cut they'll go out and buy things. That is new money and stimulus.

Arnold's picture

Naw, pay down debt, the name of the new game.

spastic_colon's picture

besides necessities what do any of us really "need"..........blow off market top for next couple weeks.

 

Maybe the "markets" can now move up to meet the inflation reality and not the phony CPI; its been artifically propped up just waiting for the opportunity.

Chris Dakota's picture
Chris Dakota (not verified) GoldLion Nov 10, 2016 9:15 AM

People will get  a big refund they hadn't planned on because we already paid this tax in 2016, I think?

nmewn's picture

lol...it cannot be from savings or tax cuts (tax cuts of course meaning money not extorted from the people for misuse somewhere else in the economy)...you are quite the indoctrinated puppy aren't you?

I would have thought you would be jumping up & down with glee about "road & infrastructure" projects  ;-)

Tarzan's picture

So, in EVERY WAY, the prognosticators and fear-mongers are wrong!

Shocking!

Unleash the sleeping giant, and slay the dragons!

ThirteenthFloor's picture

Trump

May 11, 2016

And he repeated his line that he's the "king of debt"
(CNN) Donald Trump declared Monday the U.S. never has to default on debt "because you print the money," while trying to clarify his strategy for managing the national debt.

nmewn's picture

Its all they know, they were all trained by the same Keynesian economic professors.

JRobby's picture

My guess is your meds have not kicked in?

How is this related to a POTUS elect a day ago?

dark fiber's picture

They could be setting up the stage for a total collapse once Trump is sworn in.  This market sentiment feels wrong to me for some reason.

1stepcloser's picture

its a debt based monetary system.  More debt is required for your serfdom.

new game's picture

we need a new national holiday honoring the creation of the fed.

national debt holiday, right around xmas when the minions celebrate the coming of the bills, i mean the birth of the savior, lol...

edotabin's picture

Well it was created on December 23, 1913.... close enough?

froze25's picture

I heard Carl Icon's name get thrown around. I doubt with General Flynn as an advisor he will put a Soros minion in place. Not all wealthy people are Traitors to the country.

WTFUD's picture

Might be he knows where the bodies are bur . . er, the Cash is Hidden! So you think Trump's the Banker's stopgap? His Election will spur on the EU National Sheepdom to ouster the Parties of the Elite, if nothing else; The French for example, will be emboldened to vote Marine Le Pen without being exposed to the MSM guilt trip.

new game's picture

jesse ventura syndrom explained: false hope emenates from false prophets of change.

in the end the false prophet realizes that the change is a hope that even he thought was posible can not happen and pivots to personel gain.

don't fall for it. the fal of rome was unstoppable.

solutions unimplimentable

debt pyramid math

war inevitable...

cornered by self defeating devices.

the oposition waits patiently for self destruction, then outburst for last gasp to survive from past mistakes.

like a person dying of lung cancer lighting up a cig...

Paul Kersey's picture

Might be time to buy some more popcorn. President Pence? Nah.

"Before the Electoral College even meets and officially votes for Donald Trump as the next President of the United States, the President Elect has an ordeal to go through that has nothing to do with his new job. The trial in the case of Low v. Trump University, which is a civil class action case in which Trump (also named personally in the suit) is accused of “promising, but not delivering access to” lessons about how to use his real estate techniques, as taught by “hand-picked” instructors via the operation of his non-accredited Trump University business classes. And it’s coming up fast, as the fraud trial starts with jury selection on November 28th."

http://lawnewz.com/crazy/donald-trump-president-elect-is-about-to-go-thr...

Fundies's picture

I want a fucking refund......and I'm not even American.

ThirteenthFloor's picture

Don't tell me you thought you had a choice ?

Chuck DeBongo's picture

That made me chuckle! Thank you. Thank you so much....

realWhiteNight123129's picture

Well, the infrastructure is so bad in the US that it is a low hanging fruit for also boosting productivity.... So inflationary yes, increasing debt yes, but if real interest rates stay negative (lower nominal rates than inflation) the debt might not increase as fast as GDP.... Eventually we'll get into stagflation, but if consumer have finally wage following inflation, while their mortgage is locked in nominal dollars, the real loser is China.... Gold holders won't  complain if there is inflation....  If only the US had spent all the money it spent on wars inside the US instead for infrastructure, vocational training, factual education (engineering that is to create new goods and services) the US economy would be in super shape...  The problem is not debt, the problem is non-productive debt. Spending on infrastructure is undeniably leading to higher output. Why? Because it is so bad !!! If you borrow 250K  to produce a great software module that enables people to get information faster and bring productivity gains, is the debt bad or good?  Good of course!!!  The problem is bad spending on welfare and wars and liberal arts education, you spend that instead in giving a job to guys to build a badly needed bride, or training people for factual vocational skills like mechanics, technicians, or on real education (engineering) you boost GDP faster than debt, just like when a business borrows a little sum of money to come up with the light bulb.   Quality of debt is everything.  

 

Escrava Isaura's picture

Welcome to Delusitown.

It’s not the debt, stupid. It’s the type of money.

 

 

realWhiteNight123129's picture

No it's not, read Henry Thornton or John Fullarton, Thomas Tooke... it is the type of credit which matters and makes the currency good. Convertibility is key.   

In Scotland they used very little gold in the XVIII. The currency was technically convertible in Gold, but people rarely converted. The currency circulating in Scotland and the banking system was less prone to crisis than the different private bank notes circulating in England, despite the fact that there was more gold in circulation. WHY? Because the scottish were very carefull in extending credit, they would typically issue bank notes for good credit, self-liquidating, short-term working capital receivables... (good bills).  Why were they careful? Because there were no bail-outs, unlimited personal liability against bank deposits, and jail time if they would be unable to honor deposits... 

Note that I am not confusing money and currency. Today money is M0 in the form of bank notes, in the old days it was Gold....

 

Boris D Blade's picture

Fuck, you say a lot of dumb shit trying to educate everyone around here

Boris D Blade's picture

Fuck, you say a lot of dumb shit trying to educate everyone around here

NoDebt's picture

Just be careful about "infrastructure spending".  The crumbling roads and bridges meme is an over-simplification and the statistics don't always mean what you think they mean.  

Also, I'll point out that fixing them won't lead to the productivity boost you might think it would.  Building a NEW road or bridge where one is desperately needed will.  However, repairing an existing road or bridge will NOT.  You are just coming current on years of deferred maintenance that had been neglected.  Roads carry the same number of cars no matter how many potholes they have.  Bridges carry the same number of vehicles right up until they collapse (then, zero)