Quote:
Originally Posted by thaskalos
Would you be interested in a little bet on whether TRUMP will serve out two terms? I might be able to offer you attractive odds...  |
I haven't changed my view.
I said before the election that whoever took the presidency 2016 was inheriting an economic and market bubble that grew under the Obama administration as a result of easy money from the Fed and massive deficits in Washington.
Bubbles like that always pop. The downside is typically related to the size of the bubble. The bigger it was the worse the downside.
So my prediction was that whoever won might actually be the loser. He/she was going to get blamed for the debacle that's going to follow, get thrown out of office in the next election, and do a lot of damage to their party.
The only thing that has changed is that Trump has been massively better than I expected for markets.
1. The tax breaks were huge and automatically increased the value of virtually every business in America, especially those with billions of dollars overseas that can now bring it home to invest in the US.
2. The cuts to regulations are improving investment and economic growth.
3. The trade frictions are causing uncertainty and fear mongering, but imo ultimately they will be resolved and make things better for US workers and businesses because the US is going to take global market share back.
All these things have enhanced value. At the same time, investors have understood that and bid up prices. So they are still very high despite all the value he has created. The thing is, we are almost 2 years into his term now. If he has any more tricks up in sleeve in terms trade deals and other value creating measures it's now conceivable that I may be right about the it all ending badly but wrong on the timing by enough that it could be delayed until after the next election.
I don't exactly how that changes the odds, but contrary to perceptions, his chances now (however low they may be), are better than they were the night he got elected when I gave him almost no chance. He may not be in the middle of a deep bear market and recession like I expected.
