Trumpnado Sparks Bond Bloodbath & Greatest Stock Market Rebound Since 2008 PPT Intervention, by Tyler Durden. For the US stock market, this was the best day-after-presidential-election since Reagan in 1980. There was a massive turnaround after the initial dip — bigger turnarounds only happened three times before, twice in the final months of 2008 and the other in October 1987, data compiled by Bloomberg show.
The net result: the DOW was UP 257 points. Not bad.
When the intelligentsia and the media want something and fail to genuinely listen to the masses who want something else (a “let them eat cake” feeling), they get outcomes very wrong and are shocked when they do … and boy, they got BREXIT in England and Trump in the U.S. wrong.
Yes, there were market crashes of a sort today and immediately following the BREXIT vote as well, but they were generally very brief and not anywhere as deep as the powers that be forecast (a couple of currency groups aside). They were excellent buying opportunities and in many cases, markets ended higher than they began, within a day in some cases.
Meanwhile, markets and property are over inflated in general, due largely to massive central bank money printing since 2009 and record low interest rates, so caution is still the order of the day in the medium term and markets have been easing for much of this year as much as anything due to traders becoming more wary of the consequences of those issues. This has nothing to do with excuses like Trump or BREXIT.
US election: The markets tell us president Trump is worse than Brexit, by Saul Eslake. As usual Saul Eslake, Grand Peddler of Mumbo Jumbo, gets it wrong and didn’t see it coming.
Donald Trump has emerged as the winner in the US presidential election, but even before the result was clear the prospect came as a profound shock to financial markets.
Asian stock markets, which were open as the possibility of a Trump victory began to become clearer, fell sharply, led by the Japanese market which at the time of writing had fallen by almost 6 per cent. The Australian market closed 2 per cent lower. Futures markets are signalling that US markets will be down sharply when they open later tonight (Australian time). …
These reactions tell us not simply that the financial markets hadn’t expected this outcome. They also tell us that financial markets view the consequences of this outcome quite negatively. …
It’s not difficult to understand why financial markets have taken this view.
Three reasons markets are spooked:
First, and most importantly, Donald Trump has promised to launch a trade war against China, by declaring it a “currency manipulator”. He’s also threatened to impose tariffs of up to 45 per cent on everything China exports to the United States … This could bring on a recession in the US and in other countries besides.
Second, Trump’s fiscal policies will add significantly to the US budget deficit and US public debt, potentially leading to higher long-term US interest rates (which would in turn be negative for stock prices).
Third, Trump’s repeated personal attacks on US Federal Reserve Chair Janet Yellen and his support for the push from Rand Paul and others to “audit the Fed” threaten to undermine market confidence in the Federal Reserve.
A highly paid elitist on the ABC, peddling fear and bogeymen if their buddies in the global elite did not win.
Nuh. Blew over in 24 hours.
It is worth remembering that the likes of Krugman were alarmist and wrong in stating that Brexit would mean a collapse of the UK economy. His warnings now regarding Trump are exaggerated, highly partisan and based on ideology rather than facts.
Under any circumstances, putting an irresponsible, ignorant man who takes his advice from all the wrong people in charge of the nation with the world’s most important economy would be very bad news.
People like him said the same thing after the shock 1980 US presidential result. Reagan not only fired up the greatest economic boom in decades, he won the cold war. Not saying that Trump will necessarily do the same, just that his establishment critics have an appalling track record as self-interested fear-mongers.