They must be all disciples of Paul Krugman...
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Tesla Investor's General Macroeconomic / Market Discussion
- Thread starter FluxCap
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They must be all disciples of Paul Krugman...
Actually, a survey of economists is not very useful. A bunch of them are neoliberal free trade dogmatists. There's a lot of different types of cranks in economics. It's like averaging together the opinions of members of 20 deranged cults; you don't get much useful information out of it.
I know what the best economists who have the best-tested, highest-evidence models of particular sectors of the economy say. Unfortunately, Trump is stumbling around blindly and he's not going to stumble across very many good policies by accident.
I know what the best economists who have the best-tested, highest-evidence models of particular sectors of the economy say. Unfortunately, Trump is stumbling around blindly and he's not going to stumble across very many good policies by accident.
Well, we know he supports construction, supports high speed rail, supports domestic manufacturing, and opposes free trade, but on any *other* economic topic, he doesn't seem to have significant opinions. Does he understand interest rates? Bank regulation? Agricultural policy? Probably not.
Screwing up bank regulation in particular can completely destroy the economy, and then it doesn't matter whether your other economic beliefs are valid...
He has said that interest rates are too low, but that because of the low interest rates, it makes sense to take advantage of them to rebuild infrastructure. That is a nuanced view, in comparison to what passes for deep thought in the rough and tumble world of politics.
I think it's important to recognize the substance, if any, of what an opponent believes so that you can refute it. For instance, I don't much agree with Wilbur Ross, the new Commerce Secretary, but it would be foolish to dismiss him as lacking substance.
I agree that it's important to recognize the substance, but when someone has said blatantly contradictory things to consecutive audiences, you begin to suspect that there isn't any substance.
Posturing is a thing.
Posturing is a thing.
I would resist getting lost in the noise. There's substance enough there with Trump.
What's Trump trying to do? Increase economic growth. How is he trying to do it? Seems about half of the added growth is being sought by a reduction in regulations. Regulations create costs that drag on the economy.
An example of a rational argument against the substance... It does not make sense to reduce the fuel economy standards because the added cost of national defense and health costs, as well as environmental externalities of such a reduction dwarfs the cost of the regulations.
What's Trump trying to do? Increase economic growth. How is he trying to do it? Seems about half of the added growth is being sought by a reduction in regulations. Regulations create costs that drag on the economy.
An example of a rational argument against the substance... It does not make sense to reduce the fuel economy standards because the added cost of national defense and health costs, as well as environmental externalities of such a reduction dwarfs the cost of the regulations.
Driver Dave
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He's trying just to be popular with his base.
His base allows him to control the GOP.
Controlling the GOP allows him to remain in the White House.
But...
Satisfying his base, means alienating everyone else, which means, he gets him blocked from actually doing anything in DC.
He's in a tough spot game theory wise.
If he wants to do anything, he will lose his base, and get booted from white house for Pence.
If he wants to remain in power, he needs to hold his base, which keeps him white house, but he can't do anything.
I think he's chosen to hang out, tweet away, be "President", and head down to Florida for weekend golf.
Bide his time, get out, resume Trump Inc., now bigger from sons trotting around globe for 4 years with Secret Service doing deals.
Remember, this is a man whose favorite thing is to slap his own name on buildings in enormous letters. And who is still resentful that he didn't win the popular vote (and lying about it!), which is pretty bizarre and unique for someone who is actually President.
If you think he cares about anything else more than he cares about being popular and getting attention -- you're probably wrong.
If you think he cares about anything else more than he cares about being popular and getting attention -- you're probably wrong.
Quick yellow alert from this corner:
Yield curve and Bond market indicators (one of my primary macro-markers):
Yield curve while still positive is flattening;
Also, despite rising interest rates (and expectation of more), the bond yields are dropping. This indicates substantial flow of capital into bonds as protection and possible early indications of market/economic pullback.
These are long-time-frame in segment markers, but are usually pretty solid. It's just a yellow early flag currently, but the behavior can be strongly indicative of a transitional change in future outlook (albeit early on).
Yield curve and Bond market indicators (one of my primary macro-markers):
Yield curve while still positive is flattening;
Also, despite rising interest rates (and expectation of more), the bond yields are dropping. This indicates substantial flow of capital into bonds as protection and possible early indications of market/economic pullback.
These are long-time-frame in segment markers, but are usually pretty solid. It's just a yellow early flag currently, but the behavior can be strongly indicative of a transitional change in future outlook (albeit early on).
Cathy Wood is always worth reading:
"The new bricks in the wall of worry are the valuation of the US equity market and the political risks to health care and tax reform. To some extent these risks are related. If Congress passes the first phase of health care reform, then the odds of a corporate tax rate dropping to 15-20% as part of the budget reconciliation process likely will increase meaningfully. For that reason alone, after-tax earnings could jump roughly 25-30%, pushing the S&P 500’s price-earnings (PE) ratio for 2017 down from 19X to a much more reasonable 14-16X…which could be just the beginning of the revaluation of the market. If the tax package also includes full expensing of capital goods in the year of purchase, then capital spending – which has a high multiplier on economic activity – should surge in a sustained way for the first time in more than five years. The earnings surprise to the upside could be substantial, perhaps driving the market’s PE ratio down into the low double digits. If Congress gravitates toward positive votes on health care and tax reform, the Fearless Girl should start running now, given the red light she seems to be shining on the bull market?
Another important spur to the bull market could be a peak in the inflation rate, despite surprising strength in the economy. Three forces against inflation seem to be brewing. First, statistically, commodity prices have set various gauges of inflation up for a fall. The oil price, for example, bottomed during the first quarter of last year and is now up by more than 40%, probably its peak inflation rate for the year. Second, increased capital expenditures should boost productivity, as should more rapid growth in economic activity. Productivity, which seems to have been missing in action for the last five years, is a powerful force against inflation. Finally, thanks to the five technologically enabled innovation platforms that are the starting points for ARK Invest’s research, deflationary forces are seeping into every economic sector. These platforms are genomic sequencing, robotics and automation, energy storage, next generation internet, and blockchain technology. If inflation were to stay below 2% on a sustained basis, the equity market probably would experience a multiple revaluation the likes of which we have not seen since the eighties, in which case the bull would trample any bear in its way. Instead of facing down the bull, perhaps the Fearless Girl should be running with the bull!"
Facing Down the Bull Market: What ARK Believes the "Fearless Girl" Statue Got Wrong
"The new bricks in the wall of worry are the valuation of the US equity market and the political risks to health care and tax reform. To some extent these risks are related. If Congress passes the first phase of health care reform, then the odds of a corporate tax rate dropping to 15-20% as part of the budget reconciliation process likely will increase meaningfully. For that reason alone, after-tax earnings could jump roughly 25-30%, pushing the S&P 500’s price-earnings (PE) ratio for 2017 down from 19X to a much more reasonable 14-16X…which could be just the beginning of the revaluation of the market. If the tax package also includes full expensing of capital goods in the year of purchase, then capital spending – which has a high multiplier on economic activity – should surge in a sustained way for the first time in more than five years. The earnings surprise to the upside could be substantial, perhaps driving the market’s PE ratio down into the low double digits. If Congress gravitates toward positive votes on health care and tax reform, the Fearless Girl should start running now, given the red light she seems to be shining on the bull market?
Another important spur to the bull market could be a peak in the inflation rate, despite surprising strength in the economy. Three forces against inflation seem to be brewing. First, statistically, commodity prices have set various gauges of inflation up for a fall. The oil price, for example, bottomed during the first quarter of last year and is now up by more than 40%, probably its peak inflation rate for the year. Second, increased capital expenditures should boost productivity, as should more rapid growth in economic activity. Productivity, which seems to have been missing in action for the last five years, is a powerful force against inflation. Finally, thanks to the five technologically enabled innovation platforms that are the starting points for ARK Invest’s research, deflationary forces are seeping into every economic sector. These platforms are genomic sequencing, robotics and automation, energy storage, next generation internet, and blockchain technology. If inflation were to stay below 2% on a sustained basis, the equity market probably would experience a multiple revaluation the likes of which we have not seen since the eighties, in which case the bull would trample any bear in its way. Instead of facing down the bull, perhaps the Fearless Girl should be running with the bull!"
Facing Down the Bull Market: What ARK Believes the "Fearless Girl" Statue Got Wrong
The Power Coup is now complete - all branches
Neil Gorsuch Confirmed by Senate as Supreme Court Justice
https://www.nytimes.com/2017/04/07/...ackage-region®ion=top-news&WT.nav=top-news
Neil Gorsuch Confirmed by Senate as Supreme Court Justice
https://www.nytimes.com/2017/04/07/...ackage-region®ion=top-news&WT.nav=top-news
Once the revolutionaries have destroyed all the social norms which kept the system running, there is nothing to prevent the opposition from using everything within its power to stop them.
And once it comes down to that, we know which side has the larger population. And which side has the scientists. And which side has the technology. The outcome of this is not in question: the only question is what happens in the interim.
And once it comes down to that, we know which side has the larger population. And which side has the scientists. And which side has the technology. The outcome of this is not in question: the only question is what happens in the interim.
Other than adding 30 years
And skipping Obama era
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