Trump's Trillion-Dollar Loser - What Happens Next?

Tyler Durden's picture

In the weeks since Donad Trump was elected president, US financial stocks (and energy companies) have soared with all eyes on Dow 20k. However, across the world's capital markets, investors have lost a combined $1.2 trillion in debt and equity values, as the bond losses have outweighed stock gains dramatically (especially post-Fed). The question is - what happens next?

 

The drop in global debt and equity values in Q4 2016 is very reminiscent of the drop into 2015's Fed rate hike... which did not end well...

 

But, the last time that global stocks and global bonds decoupled so aggressively was following the end of QE3... here's what happened next...

 

But it's probably different this time, right? China is fine (oh wait, failed auctions and liquidity crisis), Europe is fine (oh wait, Italian banks are collapsing), and the US economy is great (oh wait, automakers are shuttering plants due to credit-created excess inventory).

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knukles's picture

The Talking Heads and Wonks will tell us that it's time for the Biggest, Best, Largest, Most Impressive, Robust stock market Blow the Doors Off All Time Never to be Seen Again, Bitchez.
Yo!

Kind of the consensus view now, no?

wisehiney's picture

The wonks sell on every approach to the "inevitable" 20k.

Save_America1st's picture

make no mistake...the attacks will never end.  The travesty of this world-wide economic appocalypse will be blamed on Trump by TPTB.  We should all know that by now.

The entire system is in massive collapse, and since the globalist scumbags didn't win they will pull the rug out from everything they can in order to blame Trump and all us "white racists".  Make no mistake. 

Oh, and don't forget their relentless attacks against anyone who aren't part of their treasonous "media".  This is gonna get way worse before it ever gets better, bitchez.

I just hope Trump and his team know that.

But the main thing is that we all continue to know this. 

Keep stacking phyzz and all other essential gear.

Trump can't save this toilet bowl economy...nobody can, especially the globalist scumbags who created this mess.

So don't count on him even though he's not a bad guy...

count on yourselves!!!!  Stack phyzz andn other essential supplies.  You all here on ZH know the drill. 

flaminratzazz's picture

on a scale of 1 to 10 being 10 is madmax, how bad say you?

abyssinian's picture

Let me guess, all bond funds liquidate and all the money will go to stocks and push the Dow to 50,000.  I mean why not right? nothing will get this market down, so why not all money from all asset class go in to stocks? I don't even know why all the fund managers are waiting for......

flaminratzazz's picture

I see no weakness of your argument

willwork4food's picture

Even Zimbawee's stock market EXPLODED during their masive hyper inflation crisis a few years ago. Inflation? No problem, invest in stocks until the underlying value of what you'll get back will be worthless.

Get silver with those phony profits!

wisehiney's picture

Nice little reprieve it is.

It will be good to have Trump at the helm during the storm.

flaminratzazz's picture

that fvking tower looks a bit top heavy to me??

Lets Buy The Dip's picture

i think under trump and dickbrain fed, USD up and to make america great again, you can make serious money in tech, and infastructure.....his a business man, and builds buildings, so this is what he will do. 

vix is too low, what you guys think? => http://www.bit.ly/2h9Kyif

Summation is on a buy but, and summation has been 99% accurate, and called santa clause rally 1 day too soon. WOW!

It seems trump is going to make USD rally an the stock market. Could be a dip early 2017 but. Hmmm

highwaytoserfdom's picture

 

 hmm think saw this movie before Bondpocalypse Now...  Of course  the Girls coming out of the helicopter were a lot lot better looking than Janet Fellon..

Love the smell of napalm in the morning.. Smells like Old Hickory...

Can we get an executive order to put him back on the double sawbuck  and

put George Washington Carver on sawbuck

oh to get over the deplorable name calling tell em it's Samuel L (million thumbs up Pulp Fiction) that ought to trigger the SJW

Not trading vix  low judging from volume not the only one.

 

Merry Merry Christmas  and have a Happy New Year... 

DavidC's picture

Knukles,
"Kind of the consensus view now, no?"

Yes, I'd say...

DavidC

wisehiney's picture

Be right and sit tight.

Get paid to wait.

nakki's picture

S&P GAAP earnings $85.77 2005= S&P 1278

S&P GAAP earnings $90.00 2016= S&P 2260?

Never been a better time to buy!!!!

swampmanlives's picture

Hey man it's all about forward earnings.

CHoward's picture

Some people just don't get it.  When the DOW goes up that means EVERYTHING IS AWESOME, EVERYWHERE!!  Got it?!  Good!!!!!

Mustafa Kemal's picture

Ok, I feel dense. i now get it. Time to buy moar stawks!

Publicus_Reanimated's picture

Well, his campaign slogan wasn't "Make the Third World Great Again" or "Make Europe Great Again" or "Make Japan Great Again", was it?

highwaytoserfdom's picture

 

Exactly how is Trump tagged with the AlanBenFellon terror attack of industrial suicide?

While we are on the subject has anyone (Lessig) in the Pant Suit murderous mafia read Hamilton's federalist papers?  Thank god for Jefferson's VP.. Gore Vidal wrote an entertaining historical fiction on Burr..  Think should make a Broadway play and call it Burr the Deplorable.  The cast will be exclusivly Chinese an Irish to Honor the Railroad Monster Honest Abe (800,000) dead.. Heck Bernie Sanders land population barely recovered from 1860 levels..

https://www.corbettreport.com/federalreserve/

 

"Let the American people go into their debt-funding schemes and banking systems, and from that hour their boasted independence will be a mere phantom."

William Pitt, Prime Minister of Great Britain[12]

mary mary's picture

0% interest wipes out workers' pensions and keeps savers from accumulating enough capital to launch their small businesses.  0% interest is unnatural.  NOBODY loans you their hard-earned money for nothing.  They shouldn't.  So, from an ethical point of view, interest rates need to increase.  Whoever gets hurt by that, gets hurt because they chose to play for the the wrong team, the bad guys, the guys who are preying on the workers and savers.

wisehiney's picture

Without insanely massive central banker and government spending, interest rates fall due to lack of demand. When the price of goods and assets are dropping at a 5% rate, a zero bond is making you 5%.

Or you can continue to print and spend.

See venezuela.

They can stretch it out, but can never win.

At this point.

Nobodys Home's picture

Rates go up - the country can't service existing debt, never mind add moar.
Rates go down - the little guy is hurt and hurt bad.
Either way something big and bad is coming.

The way I look at it is that every month that goes buy without an implosion or explosion, we get another month to be better positioned, in whichever way you think best.
It also gives us another month to live in the relative comfort we are used to. When our Cyprus/Greece/Ukraine/Syria/Venezuela/India moment comes life may be very different. Likely in a very bad way.

Some days I am thankful for the time. Other days I wish it would blow up so we can get on with living or dying.

Latitude25's picture

I'm just waiting for them to turn the algo off that has the USD and gold inversely joined at the hip.

swampmanlives's picture

Sell your gold and buy stawks. This bull isn't stopping anytime soon.

TheAntiProgressive's picture

This isn't Trumps loss, this is the recognition that the only path out off all this debt is cheaper dollars/fiat.  That means inflation is a brewing.  If we don't have it now in spades rest assured, we will.  The only hook in this thought is the rest of the world fleeing depreciating local fiat currencies for the US dollar whether as dollars or equities that represent USD corporate assets.  Bonds are simply an interest rate play and they look ugly.  Corporations can of course raise prices, once in a bond it is either sell it for a loss or wait for the worm to turn but you better be cognizant on how much debt needs to be devalued.  You may end up with zippo.  All the debt holders will be happy as they pay off fixed low interest rate debt based on real assets and it is retired with depriciated fiat.  Solves those pesky pension demands doesn't it?

TradingTroll's picture

Sorry, not inflation as much as stagflation.

Stealing from the productive and giving those stolen goods to the unproductive destroys the capital needed to create new products , fight climate change, and cure disease.

Stagflation is when something that should cost $100 costs $1000,like many mechanical parts these days.

Aireannpure's picture

I agree. This is the FED/OBOZO after effects. Drain the swamp! How can you have inflation with so much stuff everywhere, including debt and strong dollar. Back to work and faster much faster. Just create a 100 year bond...heck make it 1000 year bond, can kicked WAY down the road AGAIN. Smellin yellin raising interest rates makes the dollar even stronger? Madness. The horror, the horror. 

Hanomy's picture

Please visit  HANOMY.com;   read it, download it, spread the word.  I believe it is the real solution to the current social, financial, political systems.  To transition from the current systems to HANOMY will take just few short years.  Hanomy turns the concept of money upside down.  It has lots of number crunching and it works as you will see.  Please make it goes viral so people aware that there is a sounded alternative and that we won’t be forced into another elites’ designed system.  All the steps to implement Hanomy are in the manifesto.  Hanomy can becomes a worldwide movement, people from around the world can flood streets worldwide and demand Hanomy, say on Feb 14.  Nations will come together and discuss because the citizens demand it.   Elites can still participate in the system, they just have to earn money, respects and power the honestly and productively.  I have tried to contact many alternative media all week last week, no result.  I need help to make it go viral.  We don’t have much time left.  The clock is ticking!.

Nobodys Home's picture

Your assessment of monetary history is quite good. This project/dream of yours seems to be a sincere attempt to improve human life and the world. Unfortunately it will never come to fruition unless everyone on the planet agree, or globalists embrace it and are able to twist it to their benefit. There is too much greed and lust for power and control already entrenched as well as vast differences in opinion, intelligence, culture and work ethic to make this work. Also, you won't be able to implement this complicated, decentralized global system of money with separate nations. The Euro is a prime example. However I salute you for your noble effort. Good luck.

P.S. This plan seems to have leanings toward communism albeit in a good way. I don't believe in communism in any form. It always ends up a catastrophe.

hedgiex's picture

Who are the losers ? China & Others. You wouldn't be even hollering all the libtard nonsense if China is the Winner. Has China (your main competitior) told you that they have given up their hegemonic quests and promise that they will be benign as Masters ? Take them down first (economically) so you can enjoy your free speeches. 

FreedomGuy's picture

It's not Trump, yet. It's the reaction to Trump and what he represents. Bonds were strong because most everyone expected more long lasting malaise with a Hillary-central planners administration, You focused on not just losing more as they squeezed rates interminably.

I see this as a return to normal balance where you get decent interest on money and you compare it to expectations about business.

I don't know how this turns out but Trump is inheriting a $20T debt which has a lot of near zero short maturities. I DO have more faith he will at least consult people who,know how markets work to address the pressures.

You can absolutely count on the fact that the MSM and Democrats will be praying for economic failure and for the balloons to burst while he is in office. They will cut him no slack nor will they allow the Obama, "I inherited a real mess from George Bush!" type excuse. That is part of their never ending double standard.

dojufitz's picture

I truly believe we should all just go back to has always worked..........................

 

.....................A PONZI SCHEME....................!

gammab0y's picture

Those last two charts do not line up.