US Economy


Trump vs Yellen

From the WSJ: Trump would like to talk the USD lower. Just about every policy he has proposed will push the USD higher. Yellen is worried about “nasty surprises” if the Fed doesn’t raise rates. My money is on Trump’s actions having a greater effect than his words… Damien Klassen is Chief Investment Officer at


Baby boomers begin to drain cash in the US

The WSJ has a piece out on the demographic effects of the baby boomers retiring: The largest generation in U.S. history has to start pulling its retirement money this year, kicking off a mandatory movement of cash that could total hundreds of billions in the coming decades. U.S. law requires anyone age 70 ½ or


Chimerica trade war good for Australia says RBA

As tensions heat up between President-elect Trump and the equally sensitive Chinese over trade policies that could lead to an all trade war, amid other problems arising from the “One-China” policy, the RBA is suggesting bring it on! In an interview to the WSJ, RBA board member Professor Ian Harper suggests any trade war would


Evaluating Trump’s corporate tax scattershot

There are a number of elements to Trump’s tax plan. Most of it involves cutting taxes on the richest and hoping that “trickle down” will sort everything out. I don’t think there will be a happy ending to that story. However, the tax plan is more complicated than that, especially at the corporate level –


Chaos as Trump confronts the fake news press

This is going to be a LONG four years. A succinct synopsis from Greg Michalowski at Forexlive: He walked into the room late and stood on the side.  A speaker spoke about how corrupt the press was – to the press – and then introduced the Vice President. He introduced the President-elect and there was


More debt for less work

From JP this week: Similar to one of our long-term investment trends – although the use of retired workers only (ignoring kids which were a much larger proportion in the 1960s) does make the graph look more dramatic than it might otherwise be.


As Obama door closes, Trumps Golden reign begins

Timing is everything in politics. As President Barack Obama gives his farewell address in Chicago, President-elect Donald Trump is responding via twitter, in his usual eloquent manner, to a new report from CNN alleging “compromising” information collected by Russia on the new World Leader. The trouble with this timing and content in a polarised landscape


US jobs undershoot but earnings rise

The monthly US employment figures were released on Friday, with risk markets and pundits hanging on all the numbers. The headline number was well below what the market expected, at only 156,000 jobs created for December, well below average growth of 180,000 for 2016, but the unemployment rate remained steady at 4.7%: source:  


US is not alone in loosening fiscal policy

From the Goldman via the WSJ: There were more developed countries that loosened rather than tightened in 2016. On its own that statistic doesn’t tell us that much (Liechtenstein takes the same amount of graph space as the US on the above chart), but it is a useful reminder that the change in conditions is close


Previewing US unemployment

Its that time of the month again – US NFP (non-farm payrolls) or unemployment – which sets the tone for the rest of the month on risk markets, as this report is the major release the Federal Reserve uses to hinge its interest rate agenda on. Heres the five year chart of headline unemployment –


Fed getting worried about inflation, Trump spending

The FOMC (Federal Open Market Committee) December meeting minutes were realised last night and the inflation hawks are looking very German indeed, as teeth are gnashed on the upcoming Trump fiscal stimulus. Does this mean an even faster pace of rate rises in 2017 as a GOP Congress spends like a drunken sailor? From Bloomberg:


Ambrose Evans-Pritchard: Credit crunch is coming

Ambrose Evans-Pritchard is back in the Fairfax press and the UK Telegraph talking up the prospect of a 2017 crunch: Trump’s reflation rally will short-circuit. Rising borrowing costs will blow fuses across the world before fiscal stimulus arrives, if it arrives. By the end of 2017 it will be clear that little has changed. Powerful


Trump mulls 10% import tariff

CNN:  President-elect Donald Trump’s transition team is discussing a proposal to impose tariffs as high as 10% on imports, according to multiple sources. A senior Trump transition official said Thursday the team is mulling up to a 10% tariff aimed at spurring US manufacturing, which could be implemented via executive action or as part of


Trump abandons “drain the swamp”

If you’re still holding to Donald Trump as a saviour for the people then think again: Trump is a card-carrying oligarch with an astonishing array of millionaires and billionaires appointed to his leading cabinet positions, as well as the policies to match in deregulation and wealthy/corporate tax cuts. He is not for “the people”.


El-Erian: The world will kill the Trump boom

From Mohmed El-Erian at Project Syndicate: US President-elect Donald Trump should have a relatively clear road ahead at home for the implementation of his economic program: with Republicans holding majorities in both houses of Congress, he seems likely to benefit from a break in the political gridlock that has paralyzed the body for the last


China dumps US debt at record pace

From SCMP: China’s holdings of US Treasuries declined to the lowest in more than six years as the world’s second-largest economy uses it currency reserves to support the yuan. Japan overtook China as America’s top foreign creditor, as its holdings edged down at a slower pace. A monthly Treasury department report showed China held US$1.12


Hugh Hendry on the Trumpian New World Order

Cross-posted from Eclectica Asset Management. Right Here, Right Now? As you know, back in late 2014 we were more constructive on risk taking opportunities as Europe prepared to launch QE, finally resetting monetary policy on a necessary looser course. And by early 2015 European stock indices had rallied 30% from their October low, despite the