Archive | December 2016

Shock, Part 4 (Divided We Are)


We began this series with a review of the likely economic policies and their implications of the new Trump administration, and discussed the long-term challenges investors face. We would have undertaken this exercise for a Clinton administration, but the election of Donald Trump represents a stark break from the broad consensus of the past 70 years favoring free (or freer) movement of goods, capital and people; the establishment of multinational treaties and supranational institutions to establish rules governing international relations; and enforcement of this world order primarily by the United States military. As such, we expanded our review of the Read More

Shock, Part 3 (The End of Pax Americana)


We are all trying to make sense of the election of Donald J. Trump to the presidency, and a few weeks ago I outlined the possible economic agenda and its consequences the administration may pursue ( In the month since the election, US stocks have risen more than 5%, and bonds have turned one of their worst months on record, as 10-year Treasury yields soared 60 basis points to almost 2 ½%. The markets’ message is that tax cuts, deregulation and large government spending on defense and infrastructure will boost economic growth with only moderately higher inflation. Apparently, trade wars Read More