” Mr. President-elect, please slow your roll!”
” Mr. President-elect, please slow your roll!”
By Gary Kaltbaum-Jan 17,2017
Let us measure our words carefully because we do love many of Donald Trump’s economic policies. We love that he wants to lower taxes. It’s our money anyhow. We love that he wants to free us from too much regulation. After all, we think we can run our lives without the help of bureaucrats. Hear that big soda Bloomberg? We love that he wants a more market-based healthcare system. Anything other than what we have been living under. Hear that Gruber? We love that he believes in school choice when so many children are in failing schools. What a concept! We love that he is negotiating price on the taxpayer behalf. When has that ever happened? We love that he sounds like he will stop the gargantuan growth of government spending which will be over $4 trillion this year as it never goes down…just up. Most importantly, we love that unlike the missed opportunity of the Obama administration, it looks like he will get neck-deep in addressing the inner city problems especially for the children who are victims on a daily basis.
But we are worried about other things, very worried.
We worry about the outcome of the constant, for lack of better words, strong-arming of companies. We worry about the day when a company tells him to take a flying leap. What does happen when you start flinging 35% tariffs all over the place? We know there have been a few companies that are going to keep jobs here. Terrific. We do not think every company will be so accommodative and now he is even targeting companies like BMW who already have 70,000 employees in the U.S. directly or indirectly. Is he going to go after every company around the globe?
Which takes us to today as President-elect Trump all but talked down the dollar even though all his proposed policy measures are what got the dollar moving higher in the first place. We just think as the head honcho, top dog, big cheese,…it is a mistake to talk currencies up or down. We think it is a mistake to talk markets up or down.
We think he needs to realize that every market around the globe, every market player around the globe listens to every word that comes out of his mouth and soon, every move that he makes.
Markets are fragile. They are living under the overhanging $20 trillion of debt here and lord knows how much around the globe. They have been living off of 0% rates, the printing of trillions and in many areas, negative rates. We know markets have been strong but love and hate are very close emotions when dealing with markets. Just in the past week, a few words sent biotech stocks careening. This morning, just a few words has the dollar being hit. Right now, markets are forgiving but eventually we will get into an unforgiving market. Hundreds of millions move and will move in a nanosecond on your words. Careful Mr. President-elect!