Democracies get the Government they deserve.
I shall remain objective, but not a big fan, but market effects of his re-ascension is my assignment. Over 30,000 lies in 4 years as President. Added $7t to the deficit during the same period. His tardiness caused the death of a million-plus COVID sufferers by not acting soon enough. You get the picture. You folks (I’m Canadian) brought him back. What were you thinking? Don’t come whining when he collectively f&&ks you and yours over, and you’re paying 5$ for an apple.
Here’s economist Larry Summers on Bloomberg. Oh, and did I mention the felony convictions and the sexual assault? Yowzers. End of rant.
Below is the market direction taken for Trump; he is the most disturbing. The fact that the market went up 1.5k on election day 2024 was more of a resolution rally than anything. The ‘relief rally’ after Trump’s reign is Biden’s. Mainly because, unlike DJT, Joe knew what he was doing. Was Biden Perfect? No. But he wasn’t a shameless, narcissistic criminal and felon. The chart below shows that while the economy was average until Trump got a hold of it—Covid aside—it pretty much got creamed. Enough of that. No argument that DJT could represent a clear and present danger, so let’s see what a very few experts—but indicative of what experts think we have ahead.
“He will at least threaten them with the tariffs and if they don’t negotiate to his liking, Trump will put them on,” Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, tells Al Jazeera.
And while he expects “fairly stiff tariffs” on imports from China, Hufbauer says there will likely be exceptions for billionaires who supported Trump, including businesses like Elon Musk’s Tesla and TikTok. (Aljazeera)
Some of Trump’s tax proposals are well-designed and would efficiently promote long-run economic growth, such as permanent expensing for machinery, equipment, and research and development (R&D).
On the other hand, some of his tax proposals, such as the exemptions for tips and Social Security income, are poorly designed and would worsen the structure of the tax code while only having a muted impact on long-run economic growth.
Though some of Trump’s most significant agenda items — tax breaks and changes to the Affordable Care Act — will take congressional approval, many won’t. The Trump administration can change immigration enforcement, impose tariffs, change health regulations, intervene in overseas wars, and shape the education system without Hill’s help. (politico)
One undeniable fact looms over Trump’s second term: Unpredictability. With a total GOP Washington roster and no guardrails in place, it’s nearly impossible to predict the market’s trajectory. Will growth continue, or will the market ‘climb a wall of worry?’ The truth is, no one knows. We are at the mercy of this unpredictable leader. Technically, he can’t be stopped. The only thing worse is the possibility of JD Vance ascending. The market’s future under Trump’s second term is a question mark, and caution is advised.
Two bright spots are the ‘posse comitatus’ and the fact that the military will execute only DJI’s lawful orders.
The Posse Comitatus Act bars federal troops from participating in civilian law enforcement except when expressly authorized by law. This 143-year-old law embodies an American tradition that sees military interference in civilian affairs as threatening democracy and personal liberty.
That said, DJT’s absolute lock on the Congress, even that might be challenged.
Complete Details of The Following
· Pardoning Jan. 6 rioters
· Firing special counsel Jack Smith
· Dispensing with criminal cases against him
· Exerting more influence on the Federal Reserve
· Nominating new Supreme Court justices
· Deporting undocumented migrants en masse
· Rolling back climate and clean energy policies
· Putting vaccine denier Robert F. Kennedy Jr. in charge of healthcare
· Cutting taxes and business regulations
· Imposing massive tariff hikes
· Rolling back protections for LGBTQ+ people
· Leaving abortion access to be decided by states
· Changing U.S. policy on Israel’s war with Hamas and Hezbollah
· Pressuring Ukraine to cede ground to Russia to end war
· Heaping pressure on NATO allies to cough up more cash
The only accurate market conclusion one can make for Trump’s second term is that conclusions can’t be made. How do you rationalize charging the Secret Service as much as $1,185 per room per night at a Trump Hotel in NYC, nearly five times the government rate?
While most presidents have had little effect on stock markets, Trump’s presidency seems to be an exception. In several pieces I’ve read, JP Morgan Chase is seen as a safe haven for the Trump years. It appears that entities deemed ‘too big to fail’ may thrive under his leadership. This nuanced view of the market’s response to Trump’s presidency suggests that while there may be challenges, there are also potential benefits for certain entities.
Trump’s recurrent cry of ‘drill baby drill’ could well starve environmental concerns with the increase in the removal of fossil fuels and other mining endeavour. The period could well be good for junior miners as they are the seeds of the growth of mining, with production, exploration, and financial benefits.
My thoughts are that DJT will affect business less than social issues. The focus on tariffs is unwinnable and is likely bluster to please the base, as are all his manic pronouncements. Do one of three things if you want to stay liquid and involved.
1. Sell everything. Sit on Cash.
2. Sell everything and buy suitable quality ETFs, bitcoin and gold for the market.
3. Pay no attention.
Trump will be a book that is only written after the fact. While it may be perceived as, and indeed might be, a slow-motion car wreck, truer words have never been written.
Faites vos jeux.
Bob Beaty
For over 30 years, Bob Beaty has been explaining concepts and companies to the global investment community. One of the original writers for Jim Cramer’s Thestreet.com, he also wrote for AOL (Can/US), the Globe and Mail, and the Huffington Post. Over that period, he illuminated small-cap companies to investors with wit and pith but mostly opinion and facts. Investing should be fun. Pedantic, staid content is no fun.
Before embarking on his writing career, Bob had a successful international journey in the finance industry. He served as a broker, derivatives product manager, and a Director of London's Credit Suisse subsidiary. His career spanned across major financial hubs including Toronto, Vancouver, and the UK, giving him a unique global perspective. (He is still fondly remembering those English client lunches.)
Other than everything Groucho Marx and George Carlin ever said, Bob lives by a simple credo;
‘Never do anything the person standing in front of you can't understand.’ Hunter S. Thompson.
Let’s go.
