Doug Noland: What a Week

This is a syndicated repost courtesy of Credit Bubble Bulletin. To view original, click here. Reposted with permission.
The S&P500 jumped 2.3% Monday in what appeared growing confidence that Hillary Clinton was on the verge of becoming the next POTUS (buoyed by Director of the FBI Comey’s statement). It’s worth noting that Monday trading saw both the Financials (XLF) and the Industrials (XLI) jump 2.5%, only to be bettered by the Biotechs’ (BTK) 4.1% surge. EM equities (EEM) rose 3.6% Monday. Election day trading was then relatively quiet, with the S&P500 adding 0.3% Tuesday.
After closing Tuesday’s session at 2,135.50, S&P 500 futures jumped to 2,151 in evening trading on exit polling and early reports from Florida that appeared favorable for Clinton. Futures, however, reversed course as it became increasingly apparent that Donald Trump was performing better than expected, especially in Florida, Pennsylvania, Michigan and Wisconsin. By midnight on the East Coast, S&P futures were ‘limit down’ 5%. DJIA futures had reversed a full thousand points, and Nasdaq futures had fallen almost 6%.

This post was published at Wall Street Examiner by Doug Noland ‘ November 12, 2016.

Week in Review: November 12, 2016

It happened. The establishment intelligentsia was wrong. With the support of 26 percent of eligible voters, Donald J. Trump was elected president of the United States.
So what comes next? Who knows! The problems inherit with politics still remain, the economy is full of warning signs, and there’s nothing government can do to make America great again besides getting out of the way. Will Trump deliver American a new foreign policy? Will his policies enrich the pockets of ‘fly over’ voters that got him into office? Will he ditch his calls for protectionism for genuine free trade? We’ll see.

This post was published at Ludwig von Mises Institute on November 12, 2016.

Krugman Gets His Alien Invasion – And Gold Bugs Get Paradise

Nobel Prize winning economist and uber-liberal New York Times columnist Paul Krugman likes to illustrate his philosophy by noting that the threat of an alien invasion would help the economy by stimulating government spending.

Well, last week’s election gave Krugman and the rest of the Keynesian establishment their alien invasion (Trump and company being only partially human when viewed through Beltway-culture eyes). And sure enough, it’s resulting in massively-higher government spending. Infrastructure is phase one:
Donald Trump Proposes to Double Hillary Clinton’s Spending on Infrastructure
(New York Times) – Donald J. Trump took a step to Hillary Clinton’s left on Tuesday, saying that he would like to spend at least twice as much as his Democratic opponent has proposed to invest in new infrastructure as part of his plan to stimulate the United States’ economy.

This post was published at DollarCollapse on NOVEMBER 12, 2016.

Get Ready… Change Is Upon Us

‘After four years of warfare that tore the world apart like never before, a peace was finally reached. But it was a peace which one man in particular vociferously condemned – and that man was John Maynard Keynes.
In just two months, Keynes wrote the book that would make him a household name around the world – The Economic Consequences of the Peace.
In the book, Keynes was highly critical of the deal struck at Versailles, which he felt sure would lead to further conflict in Europe – describing the agreement as a ‘Carthaginian peace’ – and with the passing of a surprisingly short period of time, he would be proven correct.’
~ Grant Williams in The Economic Consequences of Peace
After WWI, a particularly noxious set of treaties and economic reparations agreements were put in place that all but guaranteed a future WWII. Mr. Keynes sniffed that out and, sadly, was proven correct.

This post was published at PeakProsperity on Friday, November 11, 2016,.

The Election Unleashed A “Cognitive Dissonance Cluster Bomb”

Earlier this week listed 24 different theories that pundits have provided for why Trump won. And the list isn’t even complete, we’ve heard other explanations as well. What does it tell you when there are 24 different explanations for a thing?
As Dilbert Creator Scott Adams explains, it tells you that someone just dropped a cognitive dissonance cluster bomb on the public. Heads exploded. Cognitive dissonance set in. Weird theories came out. This is the cleanest and clearest example of cognitive dissonance you will ever see. Remember it.
This phenomenon is why a year ago I told you I was putting so much emphasis on PREDICTING the outcome of the election using the Master Persuader Filter. I told you it would be easy to fit any theory to the facts AFTER the result. And sure enough, we can fit lots of theories to the facts. At least 24 of them by CNN’s count. Generally speaking, the greater the persuasion, the more cognitive dissonance you get. Trump is – in my opinion – the greatest persuader of my lifetime. I expected this level of cognitive dissonance. Next time you see a persuader of this magnitude, you can expect the outcome to be cognitive dissonance in that case too.

This post was published at Zero Hedge on Nov 12, 2016.

Hillary Clinton Tells Donors It’s Comey’s Fault She Lost

It’s not even Monday, but the morning – or rather afternoon – quarterbacking has begun in earnest, and in a call with her top campaign funders (which likely means mostly Goldman Sachs, George Soros, Saudi Arabia and the occasional hedge fund) Hillary Clinton blamed FBI’s Comey for her defeat, in doing so she perpetuated the democrats’ tireless blaming of everyone else but themselves for their historic collapse in the election.
Translation: sorry, no refunds. Yet whoever’s fault it was that everyone, from the media, to Wall Street, to the so-called “experts” failed to predict Trump’s victory, it will hardly placate Hillary’s countless donors who were certainly hoping for some quo to result from their quid, and which may explain why – aside from one famous hike – Clinton has kept a low profile since her defeat after delivering her concession speech on Wednesday morning.
On the phone call with supporters on Saturday, Clinton said her campaign and the national party had raised $900 million from more than 3 million individual donors, according to the two participants who spoke to Reuters.

This post was published at Zero Hedge on Nov 12, 2016.

Trump Victory Leads To Unprecedented Fund Flows; Trillions In Gains, Losses

Despite the repeated warnings by websites such as this one that the polls showing Hillary Clinton ahead of the election were rigged and manipulated, misrepresenting the real popular support of the two candidates, and that the likelihood of a “shock” Trump victory is far greater than anyone was willing to admit, both traders, the media, and the punditry were stunned by the outcome which, just like Brexit, few had actually anticipated. The result, at least in global capital markets, has been an unprecedented repricing of risk assets.
As we reported before, while stocks soared and the Dow Jones hit two consecutive days of record highs after Trump’s victory, despite predictions of a crash, on belated hopes of a multi-trillion debt funded fiscal stimulus (one which may very well not happen), bonds crashed.
As JPM calculates, the sharp rise in yields inflicted a big loss in the value of the global bond universe. The dollar value of the universe of tradeable bonds globally lost $1.2 trillion over the past week falling from $54.2tr at the end of last week to $53.0tr as of cob November 10th. Most of the loss was driven by government bonds the value of which declined by $0.8 trillion globally. Partially offsetting the massive fixed-income losses, at the same the value of global equities increased by $0.8 trillion over the past week, rising from $51.5 trillion at the end of last week to $52.3 trillion as of November 11th.

This post was published at Zero Hedge on Nov 12, 2016.

Why President Trump Will Fumigate the Fed

Starting in January, President-elect Donald Trump will have a unique opportunity to pack the Federal Reserve with hard money officials.
There are currently two open Board of Governors seats, which will most likely not be filled before the end of President Obama’s tenure. Additionally, both Chair Janet Yellen and Vice-Chair Stanley Fischer’s terms will be up by 2018. Crunch the numbers and you will see that Trump has the opportunity to replace a majority of the Board of Governors and a third of the FOMC with monetary policy hawks during his presidency.
Call me crazy, but assuming that the Republican-controlled House and Senate stands behind him, I believe that Trump just may shock the financial world by shifting this country’s monetary policy in a more hawkish direction.
Yes, this is a guy that cheered on the Fed’s easy-money policies in the years before the Great Recession. And yes, Trump did say in May that he is still a ‘low interest rate person’ who will appoint another dove to head the Federal Reserve. Why in the world, then, am I arguing that the Trump administration might possibly install more hawkish members to the central bank?
Repeated Anti-Fed Campaign Rhetoric For one, Trump’s occasional dovish comments do not match the passion and enthusiasm of his repeated hawkish campaign trail rhetoric. For the past year, the president-elect has been railing against the ‘false economy’ that the Fed has created, as well as the political influence that runs rampant throughout the central bank.

This post was published at Ludwig von Mises Institute on Nov. 12, 2016.

Interview With Jim Bianco: “The Elite Opinion Does Not Count Anymore”

Submitted by Christoph Gisiger via Finanz Und Wirtschaft,
James Bianco, president of Bianco Research, cautions about big bets on the return of inflation after Donald Trump’s surprising win and sees the long term bull market at risk.
Things rarely turn out the way you expect: The blowout victory of Donald Trump not only took the world by surprise, but also the stock market is welcoming the president-elect with unexpected cheers. The Dow Jones climbed to a record high and the Dollar rallied. Wall Street is betting that Mr. Trump will tack to the political middle and get the US economy humming. We will see if that’s what they get, says Jim Bianco. The influential market strategist from Chicago who is highly regarded among institutional investors cautions that Mr. Trump is no regular politician and that risks with respect to global trade remain high.

This post was published at Zero Hedge on Nov 12, 2016.

Is Trump’s $1 Trillion Privately Funded Infrastructure Plan Feasible?

President-elect Trump has made a $1 trillion infrastructure investment one of his first priorities as president, promising in his victory speech early Wednesday morning to ‘rebuild our highways, bridges, tunnels, airports, schools, hospitals.’ As Goldman’s economics research team points out, Trump’s plan, as detailed in a report released by his economic advisers Wilbur Ross and Peter Navarro, calls for $1 trillion of spending over 10 years to be funded largely by private sources which would be repaid with tax credits and usage taxes (i.e. toll roads).
His infrastructure plan calls for up to $1 trillion in additional spending over ten years, most of it privately financed. A memo released in late October by Mr. Trump’s economic advisors Wilbur Ross and Peter Navarro detailed a plan to finance up to $1 trillion in infrastructure spending over ten years, equal to $100bn per year or about 0.5% of GDP. We previously estimated that a spending boost of this size would reduce the unemployment rate by about 0.3pp and raise inflation a touch, leading the Fed to eventually hike one or two more times by 2019 relative to a baseline without the infrastructure package. The plan described by Ross and Navarro would be largely privately financed, but encouraged by tax credits. The plan would seek to incentivize the private sector to increase investment in infrastructure projects that would be supported by future usage fees, such as road tolls. Ross and Navarro suggest that 17% of the initial investments could be financed with equity and the remainder with debt. The government would then provide a tax credit equal to 82% of the equity to reduce the cost of financing. The large role of debt-financed private investment in Mr. Trump’s infrastructure plan implies that a significant increase in interest rates could be a hurdle for the plan’s feasibility.

This post was published at Zero Hedge on Nov 12, 2016.


Tens of thousands of demonstrations and riots have been raging in major cities across the country for the past three days since Donald Trump’s election to the presidency, and as it turns out, some of these anti-Trump riots were sponsored by a George Soros front group and allied organizations.
In a 2007 email from the John Podesta release by Wikileaks, we find a discussion of financing groups for Hillary’s campaign and anti-Trump rallies such as MoveOn, a Soros-funded organization, as well as Women Vote and the Sierra Club. Following Tuesday’s election results, MoveOn called for demonstrations across the country to protest ‘misogyny, racism, Islamophobia, and xenophobia.’

This post was published at The Daily Sheeple on NOVEMBER 12, 2016.

Paul Joseph Watson Crushes The Hypocrisy Of The Left And Their “Temper Tantrum”

Earlier today, Paul Joseph Watson posted the following epic video in which he systematically destroys the utter hypocrisy of the left for, among other things, failing to denounce the violent riots flaring up across the country in response to Trump’s victory. The whole video is a must see but below is just a small selection of our favorite quotes:
“After weeks of taunting Trump supporters, over Trump’s suggestion that he might not immediately accept the election results, Hillary voters came together preached the message of unity and graciously accepted Donald Trump’s victory. Oh no, they actually rioted, attacked people in the street and threatened to kill Donald Trump and his supporters.“

This post was published at Zero Hedge on Nov 11, 2016.

Chicago Man Beaten By Angry Black Mob For Voting Trump Speaks Out

A couple of days ago we wrote about the 49-year old Chicago resident, David Wilcox, who was beaten by a group of angry black men as onlookers shouted ‘you voted Trump? you gonna pay for that sh*t,” ‘beat his ass,’ and ‘don’t vote Trump.’ Today the battered Wilcox spoke to the Chicago Tribune to give more details on the events surrounding the assault. In addition to being beaten mercilessly, Wilcox was also drug down the streets of Chicago’s West Side at 70-80 miles per hour as he attempted to prevent the mob from stealing his vehicle.
“I stopped and parked. And I asked if they had insurance, and the next thing that I knew they were beating the s— out of me,” Wilcox said Thursday. “They were beating me to have me let go of the car,” Wilcox said. “The guy went to 70 and 80 mph. If I let go, I was dead. He slowed to 45. … He tried to push the door open. … So he stepped on it again.”

This post was published at Zero Hedge on Nov 12, 2016.

11/11/2016: Europe’s ‘Convincing’ Recovery

Europe’s strong, convincing, systemic recovery … the meme of the European leaders from Ireland all the way across to the Baltics, and save for Greece, from the Mediterranean to Arctic Ocean comes to test with reality in the latest Pictet Quarterly and if the only chart were all you needed to see why the Continent is drowning in populist politics, here it is:

This post was published at True Economics on November 12, 2016.

Will the ‘Rout’ in Government Bonds Turn into Carnage?

‘Inflation Trade’ Heats Up, ‘Greater-Fool’ Trade Falls Apart
The Government ‘bond rout’ didn’t start with Trump’s election victory. It started in July. And it didn’t just hit US Treasuries. It hit government bonds around the world. It’s predicated on the idea that inflation was raising its ugly head again. That idea has now become further entrenched.
The threat of inflation puts holders of low-yielding or zero-yielding long-term bonds in a very foul mood because the purchasing power of their capital gets destroyed without compensation.
It hit US Treasuries particularly hard. Central banks can push down long-term rates by buying bonds. The ECB and the Bank of Japan are doing that. But the Fed has been flip-flopping about raising rates. There is a good chance it will raise them another notch in December, from nearly nothing, by almost nothing, to next to nothing. So it isn’t going to revolutionize short-term rates. But it does point out that long-term rates in the US are on their own.
Then Trump won. He’d campaigned on a big deficit-funded stimulus program that includes a military buildup and – by golly, much needed – infrastructure work, funded, so to speak, by corporate and individual tax cuts….

This post was published at Wolf Street by Wolf Richter ‘ November 11, 2016.

How the Donald Trump Tax Plan Will Work

In his first 100 days as president, Donald Trump has vowed to significantly revamp the U. S.’ tax code.
Among its many changes, the Donald Trump tax plan will provide large tax cuts for the middle class, simplify the tax code, and reduce the corporate tax rate.
Here’s a closer look at the key elements of the Donald Trump tax plan…
How the Donald Trump Tax Plan Will Affect Personal Tax Rates
Under Trump’s tax plan, low-income Americans will have an effective income tax rate of 0%. Although, Trump’s tax plan hasn’t yet defined the requirement for being a part of the ‘low-income’ bracket.
The rates for married-joint filers will be cut down into three brackets from seven. Here are their rates:

This post was published at Wall Street Examiner by Cameron Saucier ‘ November 11, 2016.

What Donald Trump’s Proposed Tax Cut Means For You

Now that Trump is president, both individual and corporate tax-payers are taking a second look at Trump’s proposed tax regime to see how it will impact their bottom line.
Here is a quick primer.
Trump has proposed personal and business tax reform that would reduce tax revenues by an estimated $4.4 trillion over ten years, or roughly 1.9% of GDP over that period. Alternatively, this also means that GDP will grow by roughly the same amount, all else equal, with incremental debt use to fund the shortfall. Roughly half of this cost is estimated to come from his proposed corporate tax reform plan, which would reduce the corporate income tax rate to 15% and would impose a one-time 10% tax on all foreign earnings not yet taxed by the US.
Companies would be free to repatriate earnings without additional tax once this tax has been paid. Like the House Republican proposal, this would involve a transition to a new corporate tax system for taxing foreign earnings. The two plans are similar in several other respects as well, including a top individual marginal tax rate of 33%. However, the House Republican plan is estimated to cost around half as much over the next ten years as Mr. Trump’s plan, at least in part because it proposes to go further in limiting or eliminating existing individual and corporate tax preferences.

This post was published at Zero Hedge on Nov 11, 2016.