The market did not selloff today. Risk was merely repriced and greater premiums were being offered in an effort to attract buyers. Everything discussed in this blog during the past six months was brought to light and the most important outcome was that the narrative has changed. The Trump agenda of tax and health care reform, and regulatory rollbacks was seen being delayed by the possible legal issues confronting the White House. Notes From Underground is apolitical and is solely vested in understanding the policy impact of any political outcomes, which is why it is geared toward political economy. Or, as Deng Xiaoping would say: “I don’t care if the cat is white or black as long as it catches mice.” Since Trump’s inauguration, the mainstream media has been relentless in its effort to cast Trump in a negative light and the Tweeter-in-chief has certainly provided the tinder to keep the fires lit.
Posts Tagged ‘Donald Trump’
Notes From Underground: Nothing New to See, Except the Equity Markets Finally Added Some Risk Premium
May 17, 2017Notes From Underground: Putting Perspective To Our Narrative
January 24, 2017Let’s be clear about the unfolding political and economic landscape: It is the desire of the Trumpians and the anti-Trumps to control the political dialogue. The media is putting President trump and his appointees under a microscope, which is what the press should always be doing. (My apolitical belief for the fourth estate is that a free press should be responsible in pursuit of the “facts,” but if they have a bias it should be “to afflict the comforted and comfort the afflicted.”) In my opinion, during the past 20 years the U.S. press has devolved into a sycophantic mob as everything becomes about access to those with the greatest celebrity status, which usually means wealthy. The financial media especially bows to the rich because if you are a billionaire your views go unchallenged for fear of being shunned as it undermines the concept of, “if you’re rich, they think you really know.”
Notes From Underground: The Answer Is, “We’ll See”
November 10, 2016The experts are out with more ridiculous forecasts about the Trump victory and what it means for the various aspects of the financial markets. But let me toot my own horn for a moment: The trading outcomes for a Trump victory were on target, except for the dollar rally sustaining itself, but that is something I will be analyzing as we go forward. It amazes me how the media rushes back to the same forecasters who have so badly predicted many of the major political outcomes of the last two years. An important book for my readers is Tetlock’s “Superforecasting,” which makes a very powerful argument about following the experts.
Notes From Underground: Comey, Comey, Comey, Comey, Take Another Piece of My Wallet, Now Baby
November 7, 2016FBI director James Comey played the bureaucratic card again when he released yet another pre-election report on the Clinton files. Comey issued an all-clear on any sort of criminal prosecution involving the newest Clinton file leaks. It’s interesting that the FBI director issued the letter three hours before the opening of the U.S. electronic exchanges, but as expected, the global equity experienced a relief rally in anticipation of a Hillary Clinton victory.
Notes From Underground: Measuring Economic and Political Outcomes; Analytics Yes, Flawed Constructs No
November 6, 2016We are in the period when financial markets are depending on measurements of human actions to proscribe probabilities for profitable investment. On Friday, the jobs report reflected the measurement of labor statistical data in order to achieve some forward-looking view on the health of the U.S. economy. The jobs data was a mixed result as nonfarm payrolls in the private sector were weaker than consensus but the important average hourly earnings (AHE) increased at a robust 0.4%, which SHOULD give the hawks on the FOMC a push to raise rates. But of course one month’s robust data is certainly not a trend. Chair Yellen has been laying the ground work for the data running hotter for longer so 0.4% is a positive but there is room for further gains in wage increases. Besides, if the wage gains are coming out of corporate profits all the better from the perspective of a career labor economist.
Notes From Underground: In Preparation For Tomorrow’s FOMC, The Vote Is Key
November 1, 2016There is a very MINUTE chance of any FED action ahead of the November 8 presidential election. The polls are far too close and as previously stated only if Hillary had an insurmountable lead would the FED raise rates in an effort to regain some of its lost credibility. THE MOST SIGNIFICANT PIECE OF THE FED STATEMENT WILL BE THE FOMC VOTE. The previous meeting saw a shift to 7-3 for maintaining the current policy with all the dissenters being regional Federal Reserve presidents. Stanley Fischer has been–the Governor who speaks loudly but carries a small stick–failed to bring action to his frequent speeches about raising the fed funds rate. If the Fed vice chair were to bolt from the unified group of FOMC Governors and dissent against Yellen and Brainard that would lead to a more hawkish view on FED policy. I THINK THE VOTE WILL BE 8-2 as Boston Fed President Eric Rosengren will move back to supporting Yellen .