Sunday, November 13, 2016

Russell Clark; "A darker less safe world"

"First Brexit and now the Trump triumph has left many supporters of open liberal economies despairing. They feel that the world is turning in on itself and that perhaps a darker less safe world is emerging.

And perhaps they are right.

The economy is no less artificially stable than before the election,
and increasing levels of artificial growth/stability 
leads to higher levels of inevitable instability

But in many ways, the great western democracies of the world, the UK and the US are working as they should. It is plainly obvious that large parts of the population in both the UK and the US feel that the system has not worked for them, and they have voted for change. And those voters have had their voices heard and change is on the way.

I have a neighbor with $1,100 monthly health care payments
with $8,000 out of pocket each year before the insurance kicks in

If they roll over the same problem to 2017,
it's another $8,000 out of pocket, which is likely

We got shafted by the health care industry,
and doom on whomever took their money and let them do it
on both sides of the aisle

Undemocratic regimes in the rest of the world look on in either horror or bemusement at the changes in the UK and US and congratulate themselves that their system is so safe and stable. And yet, the reality is that if the political system cannot provide the change that people seek, then eventually and inevitably, revolution becomes the only option for change. And revolution always extracts a very high price on those that have been in power.

And we may have some unexpected uprisings 
if those at the federal level don't get their shit together quickly

...domestic US investors have reappraised their views of US domestic growth upwards...

Quite the potential mistake

The economic output of those on the losing side may fall

The movie industry should do well
as many disapear into alternate realities

While the stated aims of the Trump administration are very pro-growth, to me the actual effects seem likely to disappoint. Plans to allow more drilling will be dependent on a much higher oil and gas price. Scrapping car emission standards whilst good for SUV makers, will unlikely reverse the falling demand for cars due to high levels of auto debt. Lower taxes and more infrastructure spending may well be bullish for growth, but need to be balanced against the sell-off in the long end of bonds, which will have a negative effect on housing and with DR Horton reporting weak numbers makes, I feel growth will disappoint in the short term.

The Roy Carroll's of our land will make millions,
unless interest rates rise
and they whole shit house goes up in flames

Jim Morrison reference

The more apparent of the negative aspects is that higher bond yields are starting to cause some financial pressure in Hong Kong and Chinese interest rates.

If a trade war becomes more likely, then a large Chinese devaluation also becomes more likely. 

...the Trump win makes the break up of the Eurozone far more likely...

After Brexit, being short equities and long bonds was a fantastic trade for a week or two, but then reversed quickly after, causing severe pain for those that had reacted to the market quickly. I think the Trump win has seen many investors sell defensive positions and buy cyclical positions.

I suspect they will come to regret that..."
When bond yields go up, the value of bonds go down

This is going to happen to Greensboro, Guilford County and North Carolina Pension Funds

"NC Blue Cross announces rate increase of 24.3 percent for ACA marketplace plans"

The Taylor rule and how out of whack the Federal Reserve made our economy

"Once a deposit is made at the bank, it’s no longer your property. It’s the bank’s."

Doesn't it seem counter intuitive? We may have transcended complacency and some links

Seems unnatural?; "The overnight HIBOR, or Hong Kong Interbank Offered Rate, jumped 3.88% points to 5.45%"

Money from nothing; "ECB's QE bond buying hits €1 trillion milestone"

"The Swiss central bank is now the eighth largest investor in publicly traded shares of Facebook"

"...The US is spiraling down into financial, economic and political collapse...,"

One month LIBOR rate

'We' have been killing a lot of folks in Yemen with Saudi Arabia