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A 6 Step Plan for Trump to Make Our Money Great Again

A 6 Step Plan for Trump to Make Our Money Great Again

By: Jp Cortez & Stefan Gleason | Tue, Nov 29, 2016
 Donald Trump will be sworn in as the 45th president of the United States in January. Americans will then find out then if “Make America Great Again” is more than a campaign slogan.

It isn’t going to be easy. On day one, he will inherit a $20 trillion federal deficit and a moribund economy increasingly reliant on low interest rates and central bank stimulus.

There are plenty of economic problems to address, but the lack of sound money lies at the heart of them all. The Federal Reserve Note — a privately issued, un-backed debt instrument that supplanted our gold and silver backed U.S. dollar — has lost more than 90% of its purchasing power since Nixon severed the final link to gold in 1971. Politicians and central bankers have since been borrowing and printing currency without restraint to bankroll today’s bloated and insolvent federal government.

Trump and Pence Have Voiced Support for Gold as Money

Gold Bars

There is some reason to believe that Trump will take meaningful steps to Make Our Money Great Again. During the campaign, Trump criticized the Federal Reserve’s loose money, low interest rate policies as a problem that must be addressed. Trump has also said “We used to have a very, very solid country because it was based on the gold standard… bringing back the gold standard would be very hard to do, but boy would it be wonderful. We’d have a standard on which to base our money.”

Vice President Elect Mike Pence has also suggested that policymakers should strive to restore sound money. He said, “Robert Zoellick, the president of the World Bank, encouraged that we rethink the international currency including the role of gold, and I agree. I think the time has come to have a debate over gold, and the proper role it should play in our nation’s monetary affairs.”

So, first and foremost, the Trump administration should form a commission to study and map out how best to reintroduce gold and silver as a formal part of our monetary system. In the meantime, there are several other steps the Trump administration should take to move us toward sound money in America:

Turn the Tables by Auditing the Money Masters

From Ron Paul to Bernie Sanders and many people in between, there has been plenty of support for “Audit the Fed” legislation. Politicians and constituents alike agree that the Federal Reserve lacks even the most basic oversight a government-sponsored institution should have — particularly when its officials can make decisions which can bring the American economy to its knees.

But Trump shouldn’t stop there; we need to audit the gold.

The last time there was a reasonably credible audit of America’s gold reserves was in the 1950s. Since then, there has been little more than peek-a-boo glances at the gold. The most recent status report done by the Department of the Treasury, claims that Fort Knox holds 147,341,858.382 fine troy ounces of gold.

However, many question the accuracy of that report and whether it tells the whole story. There is evidence the U.S. Treasury has engaged in gold leasing and other financial alchemy. Even if all the gold is still held in U.S. vaults, it may have been leased, sold, pledged as collateral, or could be encumbered in other ways. A full and independent audit is critical.

Remove Federal Taxation on Precious Metals

Another necessary step in freeing gold and silver to be used once again as money is to eliminate capital gains taxation on monetary metals. At the federal level, IRS bureaucrats insist that gold and silver be taxed when exchanged for Federal Reserve Notes — or when used in barter transactions.

When our government’s inflationary policies lower the purchasing power of the Federal Reserve Note, precious metals’ nominal dollar value generally rises, triggering a “gain.” The gain may be purely fictional in real terms. But these “gains” are still taxed — thus unfairly punishing people for owning precious metals as money.

Appoint Proponents of Sound Money to the Fed, CEA, and CFTC

President-elect Trump’s rhetoric is loaded with getting people back to work. He’ll play a hand in that directly when he makes appointments throughout his presidency. Among the most impactful will be his appointments to the Federal Reserve.

The Federal Reserve, the privately held central bank of the United States, has an unrivaled ability to manipulate and distort the economy. For much of the past 30 years, starting with Alan Greenspan, the Fed has loosened the money supply with low interest rates and quantitative easing. And it’s created moral hazards by bailing out irresponsible market players.

Tommy Behnke writes, “There are currently two vacant positions on the Federal Reserve Board of Governors, the main governing body of the central bank. Chairwoman Janet Yellen and Vice-Chair Stanley Fischer’s terms will expire by 2018. This means that… Trump will have the opportunity to replace four of the Fed’s seven leading officials with conservative figures during his presidency.”

The Council of Economic Advisors (CEA) advises the President on economic policy and prepares the Economic Report of the President. The council is comprised of 3 members nominated by the President and approved by the Senate, and its members are typically professors on a short-term leave of absence from their universities.

Trump has the opportunity to appoint new members to this advisory body. He should look to economists who ascribe to the Austrian school rather than selecting yet more Keynesian school economists who have been cheerleaders for central government planning and an inflationary monetary policy for decades.

The people Trump appoints to the U.S. Commodity Futures Trading Commission (CFTC) will also have substantial impact on the markets. In the recent past, the CFTC received complaints about concentrated short selling done intentionally to push silver and gold prices down. For example, there is strong evidence that unscrupulous banks and traders often attack during periods of low liquidity in the markets such as the middle of the night.

Former CFTC member Bart Chilton and others expressed alarm at the CFTC’s unwillingness to prosecute the manipulators who may be responsible for artificially low prices (and significant investment losses) in gold and silver. Lower gold and silver prices appeal to government and central bank officials who get uncomfortable when the shortcomings of their unbacked fiat currency system are exposed.

The largest contributor to inflation and financial turmoil is dishonest money — enabling bureaucrats to run perpetual government deficits and pile up the federal debt. If Trump takes the steps outlined above, he can indeed make our money great again.

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Trumponomics suddenly gets big Wall Street thumbs up


Trumponomics suddenly gets big Wall Street thumbs up


Donald Trump’s economic plans are suddenly getting gold stars on Wall Street.

Big banks such as Bank of America (BAC), UBS (UBS) and HSBC (HSBC) are bumping up their predictions for U.S. growth and stock market gains. The reason? Trumponomics.

 “Following Donald Trump’s election victory, we have altered our GDP forecasts as we are now expecting a modest fiscal stimulus from lower tax rates and higher government spending,” wrote HSBC chief U.S. economist Kevin Logan in a recent report.

It’s a stunning reversal from the days before the election when economists and market experts at many Wall Street banks were forecasting dire consequences — a recession and a swift market drop — if Trump were elected president.

Now many are saying the opposite: Trump is good for growth.

“Well-executed U.S. fiscal policy could boost growth substantially,” says Don Rissmiller of investment firm Strategas. Rissmiller predicts GDP growth could be a full 1% higher in 2017 and 2018.

The U.S. has been expanding at a pace of about 2% a year. Trump vows to get America to 4%.

The Trump market rally

The stock market has surged to record levels after Trump’s election. Investors cheered his promises of massive tax cuts for individuals and businesses, a rollback on onerous regulations and up to $1 trillion of new government spending on roads, bridges and other infrastructure.

The Dow is up over 5% this month, and comes after three months of losses.

“The market has sailed through some of this year’s biggest shocks (U.K. Referendum, U.S. election),” wrote the Bank of America Merrill Lynch team in a recent report. The team raised its forecast for the S&P 500 index to end the year at 2,100, up from 2,000.

On top of the tax cuts, investors also like the idea of giving big businesses like Apple (AAPL, Tech30) a tax discount to bring the cash they have stashed overseas back to the United States. That money coming back could be spent on companies buying up more stock, which would further boost prices.

The big asterisk on Trumponomics

But Wall Steet’s newfound love for Trumponomics comes with a big asterisk: Trump can’t get too protectionist on trade and immigration.

Wells Fargo (WFC) put it this way: “Tax cuts and additional federal spending could stimulate economic growth, but tariffs and restricting immigration may slow the economy. These policy prospects create potentially offsetting effects.” Due to the trade concerns, Wells Fargo hasn’t hiked its GDP forecast. However it does expect higher inflation.

Mitt Romney — now under consideration to be Trump’s Secretary of State pick — was one of many business leaders who slammed Trump for his plans to place hefty taxes on Mexican and Chinese goods coming into the U.S. Romney even said Trump’s trade ideas would send the nation careening into a recession.

Trump’s plan for his first 100 days in office includes “renegotiating” or “withdrawing” from NAFTA and labeling China a “currency manipulator.” It’s unclear how far he will go.

A rundown of experts lifting their forecasts

Here’s a rundown of who’s lifted forecasts and what they’re saying:

Bank of America Merrill Lynch: “Our 2016 year-end target shifts to 2,100 from 2,000 previously.”

HSBC: We are raising our GDP forecast for 2017 to 2.3% from 2.1% in anticipation of a boost to consumption spending. The stimulus effect should be larger in 2018 as the full impact of tax cuts affects household finances. We forecast GDP growth in 2018 to average 2.7%, up from our previous forecast of 2.2%.”

UBS: “U.S. GDP is likely to accelerate next year…A new fiscal policy regime — corporate and household income tax cuts — may further contribute to broader GDP growth although there’s obviously uncertainty around new policy as well as an important drag from uncertainty around trade policy.”

Capital Economics: “We now expect GDP growth to accelerate to 2.75% next year (up from 2%), with CPI inflation climbing toward 3%.”

Yardeni Research: “In Trump World, pressure on profits could be very bullish for stocks thanks to over $2 trillion in repatriated cash and a significant cut in the corporate tax rate! That’s a new reality for sure.”

Strategas: “A key message of the market recently has been: Something is going to get done. Single-party government matters. It is possible that well-executed U.S. fiscal policy could boost growth substantially (1%+ on GDP) in 2017-18. Corporate earnings should benefit.”

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Published at Tue, 29 Nov 2016 17:10:08 +0000

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Will Landlord-in-Chief Trump be good for real estate?


Does Trump go far enough to eliminate conflicts?

Will Landlord-in-Chief Trump be good for real estate?

How’s this for irony? Donald Trump made his name and fortune from real estate. You can argue that he will soon be the nation’s first Landlord-in-Chief. But real estate stocks have tumbled since Trump was elected president.

The Real Estate Select Sector SPDR (XLRE), an ETF that owns big real estate firms like mall operator Simon (SPG) and apartment complex companies Equity Residential (EQR) and AvalonBay (AVB), has fallen 3% since Trump defeated Hillary Clinton.

The declines stand in sharp contrast to the rest of the market, which has enjoyed a Trump rally, led by financial and healthcare stocks, construction companies and retailers.

So why are real estate investment trusts, or REITs as they are commonly known, struggling?

REITs pay big dividends. And with bond yields surging since the election, partly due to expectations that Trump will need to rack up debt to make his $1 trillion infrastructure spending plans a reality, high yielding stocks like REITs are no longer attractive.

Investors are betting REITs and other big dividend payers will be less attractive in an environment where bond rates are going up. That’s why other big dividend payers, most notably utilities and consumer staples companies, have also lagged the market lately.

But is the market getting this wrong?

Yes, many investors have flocked to REITs solely for their dividends. But the market may be underestimating the possibility that Trump will look to take care of his own, so to speak.

Of course, Trump will need to be extra careful to avoid the appearance of any conflicts of interest. It doesn’t help that his daughter Ivanka is married to real estate developer Jared Kushner. And both are on his transition team.

Trump has already faced criticism about what he plans to do with his massive real estate holdings. Some think Trump should sell his investments outright, but he is planning to place them in a trust to be controlled by his adult children.

These issues aside, REITs should benefit from Trump stimulus.

Karin Ford, senior real estate analyst for MUFG Securities Americas, met with several REIT executives at an industry conference in Phoenix just after the election. In a report to clients, she noted that real estate leaders were upbeat.

“REIT managements believe that a Trump presidency will be positive for fundamentals. They expect commercial real estate to benefit from rising business confidence, lower tax rates, and fiscal stimulus,” Ford wrote.

Ford noted that executives at Camden Property Trus (CPT)were hopeful that Trump’s plans will lead to more job growth, which should lead to higher demand for apartments.

And executives at Alexandria Real Estate (ARE), a REIT that owns research labs used by drug and biotech companies, told Ford that their tenants should thrive under Trump since they believe that “drug pricing restrictions are not high on his agenda.”

Managers at another healthcare REIT, Healthcare Trust of America (HTA), also told Ford they weren’t worried about Trump unwinding the Affordable Care Act, or Obamacare.

“We even heard cautious optimism from a few healthcare REITs, the managements of which believe that changes to Obamacare may not be that harmful to their business,” she wrote.

Ford noted that the Healthcare Trust of America executives said “lower-cost, outpatient trends are here to stay and that accelerating economic activity could boost medical office rent growth.”

But what about other potential headwinds for REITs? Won’t inflation hurt the sector? Not necessarily.

Mitch Wasterlain, founder of CAPFUNDR, an investment firm focusing on real estate funds, said in a report after the election that inflation could lead to more pricing power for real estate companies. They’ll be able to demand higher rents.

“Historically, real estate has done well in high interest rate, inflationary environments,” Wasterlain wrote.

But the worst may be over given that REITs have been beaten up so much in the past few months due to fears that stimulus by either Trump or Clinton would drive up interest rates.

The Real Estate Select SPDR ETF has tumbled more than 10% since it was separated from S&P’s financial sector and became its own sector in September.

“With the pullback in REITs, valuations are now attractive, as fundamentals remain solid and balance sheets are as strong as they have ever been,” said William Lynch, director of investments at Hinsdale Associates, in a report.

So real estate may still wind up being a good investment during Trump’s tenure.

Now Trump just needs to figure out what he’ll do with all his real estate holdings to avoid any conflicts of interest.

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My Trading Journal: 30 Day Trading Journal

Published at Wed, 23 Nov 2016 17:41:39 +0000

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U.S. tax refund delays may surprise low-income filers


by stevepb from Pixabay

U.S. tax refund delays may surprise low-income filers

By Beth Pinsker

Deep within the recesses of recent tax policy is a provision that will delay refunds for millions of taxpayers who file for two popular credits aimed at helping low-income workers.

The Internal Revenue Service last week reminded filers that no refunds would be available before Feb. 15 for returns claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC). The changes stem from the Protecting Americans From Tax Hikes Act of 2015, known as PATH.

The IRS will open up e-filing for 2016 returns around Jan. 23, three days after the inauguration of Donald Trump as president.

Many of those who claim these credits tend to file their taxes early and count on the money coming well within the IRS’s traditional 21-day refund period.

“It’s not highly publicized, but it will impact a lot of the hardest working and will hit them early and the most difficult period,” said Mark Steber, chief tax office at preparer Jackson Hewitt.

The reason for the delays is to prevent fraud and theft, which was particularly rampant among about 26 million returns claiming $65.6 billion of Earned Income Tax Credits for 2015.

The credits go to qualifying people whose deductions exceed their income. The average 2015 refund was $2,482, according to IRS data. The maximum allowed by law is $6,318 for a return claiming three or more children. The Additional Child Tax Credit can add up to an additional $3,000.

The IRS has said that it would process returns normally after Feb. 15, but tax preparers still have a lot of questions.

“Will all direct deposit returns go on Feb. 15? I don’t know,” said Jeffrey Schneider, an enrolled agent with SFS Tax & Accounting Services in Port St. Lucie, Florida. “I’m just making a presumption, but most of these filers don’t have bank accounts, so they don’t get direct deposit.”

A dozen or so clients of Schneider’s clients affected by these delays will be notified via his email newsletter, he said.

“If they get their W-2 early, and they’re expecting $8,000 – they’ll go nuts, I’ll guarantee you,” Schneider said.

Schneider and other tax preparers said they were worried that filers might seek advances from refund advance outfits, which charge high interest rates and fees.

Tax preparer Jackson Hewitt has an alternative, the Express Refund Advance, with no interest or fees, that will start early this year – on Dec. 15, with the option to pre-qualify before the end of November.

Jackson Hewitt arranges loans for qualifying clients through partner MetaBank for $200 to $1,300, and also helps them open a temporary deposit account with another partner bank for the refund. When the IRS direct-deposits the funds, the client repays the loan. If the refund falls short, Jackson Hewitt will take the loss.

“The client has told us that they don’t want to go into debt, but they already earned this money and we’re just getting it to them,” Jackson Hewitt President David Prokupek said.

If taxpayers can just hold out a few weeks, however, they can get their checks directly and not deal with any middlemen.

“What people need to know is, first of all, it’s industry-wide and the IRS says still to file. As soon as Feb. 15 hits, they will release the refund,” Lisa Greene-Lewis, a CPA and TurboTax blog editor, said.

(Editing by Lauren Young and Richard Chang)

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Published at Tue, 22 Nov 2016 20:35:10 +0000

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Market euphoria forgets Trump’s scary promises


NAFTA explained

Market euphoria forgets Trump’s scary promises

Wall Street is in heaven these days. Donald Trump’s surprise election has led to a rally, carrying the Dow above 19,000 for the first time ever.

The Trump rally has been sparked by hopes that the president-elect will follow through on promises to slash taxes, roll back regulation and ramp up infrastructure spending. Many are betting a focus on these strategies will finally unleash the American economy after years of sluggish growth.

But lost in the post-election euphoria is the fact that this rally has been almost exclusively built on Trump’s pro-business campaign promises — not the ones that frighten many investors.

Trump has also promised to tear up NAFTA, slap big tariffs on China, break up big banks and audit the Federal Reserve — all events that make the markets very nervous. That’s not even counting Trump’s unpredictable nature, which suggests years of precisely the uncertainty that investors hate.

“The market seems to be grabbing on to all the prospective good things and ignoring the negative issues lurking out there,” said Mark Luschini, chief investment strategist at Janney Capital.

Luschini said he’s most concerned about Trump’s promises to “terminate” NAFTA and the risk that imposing big tariffs on goods from China and Mexico will ricochet back to the American economy.

“Trade is the big one. I’m worried about retaliatory practices by trade partners that could harm multinational revenues,” he said.

Peter Boockvar, chief market analyst at The Lindsey Group, shares those worries. “We just have to hope Trump doesn’t follow through with his trade stuff.”

Here’s a sampling of the Trump campaign rhetoric that investors seem to be forgetting, or at least hoping won’t turn into actual action:

Killing NAFTA: Trump’s promise this week to withdraw the U.S. from the Trans-Pacific Partnership (TPP) is a fresh reminder of the anti-trade stance he ran on. Once TPP is officially dead, Trump has pledged to renegotiate or “terminate” NAFTA, the North American Free Trade Agreement that he has called the “worst trade deal in history.”

Trump has the power to unilaterally withdraw from this trade deal with Mexico and Canada without the approval of Congress. Economists have warned that doing so would likely cost many U.S. jobs, millions of which depend on free trade with Mexico.

Tariffs could spark trade war: Trump didn’t just pledge to end NAFTA, he wants to slap big tariffs on China and Mexico. Again, Trump does have the authority to do this without Congress.

But what would happen if Trump installed 35% tariffs on Mexico and 45% on China, as he’s said? Many fear it would spark a tit-for-tat response from trading partners that devolves into a trade war. That is a scary outcome for the market, especially given that about half of S&P 500 revenues are from overseas.

Break up the big banks? Don’t let the rally for stocks — including big banks — fool you, Trump is no friend to Wall Street. In fact, Trump has advocated for breaking up America’s big banks. The GOP platform at this summer’s convention called for bringing back the Glass-Steagall Act, the Great Depression-era law that bans banks from serving both Wall Street and Main Street. A return of Glass-Steagall would force mega banks like JPMorgan Chase (JPM) and Citigroup (C)to shrink themselves.

Trump’s chief strategist, ex-Goldman Sachs banker Steve Bannon, would love this. Bannon told Buzzfeed in 2014 that the Wall Street meltdown was driven by bankers’ “greed” and took issue with the fact that bank execs didn’t face criminal charges.

Attacking the Federal Reserve: During the campaign, Trump broke from tradition by taking repeated shots at Fed chair Janet Yellen. He claimed Yellen was keeping rates low to help President Obama and “being more political than Secretary Clinton.” Trump also backs a GOP push called “Audit the Fed” that would allow the General Accountability Office to review the central bank’s monetary policy decisions.

Any legislation that threatens the Fed’s independence makes investors uneasy. The worry is the Fed would take orders from politicians, instead of basing interest rate decisions on the goal of a strong job market along with steady inflation. Yellen recently warned that this independence is “critically important” and noted that countries where central banks are “subject to political pressure” have suffered “terrible outcomes.”

Deporting 11 million undocumented immigrants: Trump has promised to take a much tougher stance on immigration and even pledged to deport up to 11 million illegal immigrants. But many warn that mass deportations would be extremely divisive and costly for both the government and businesses that rely on these workers. Research at the Wharton School estimates that the plan to deport undocumented workers would result in four million lost jobs by 2030. Luschini, the Janney strategist, worries that Trump’s immigration policies could hurt consumer spending, spark mass protests and fuel “undercurrents about inequality.”

Even Trump’s more moderate immigration ideas could hurt some companies. Specifically, Trump has threatened to crack down on the practice of hiring foreign workers through H-1B visas and Jeff Sessions, his proposed Attorney General, is a vocal critic of this program. Silicon Valley has long relied on the H-1B program to find talented workers that help fuel innovation.

— CNNMoney’s Patrick Gillespie and Heather Long contributed to this report.


Published at Tue, 22 Nov 2016 17:33:52 +0000

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Election Rejection: Liberal Hatred and Hypocrisy Rage in Violence Due to Biased Media



Election Rejection: Liberal Hatred and Hypocrisy Rage in Violence Due to Biased Media

When Donald Trump would not state with certainty that he would accept the election results before even knowing what the results were or how they might come about, liberals wrung their hands all over the media in grief over the loss of democracy as we know it. Hillary, herself, decried that she had never heard anything so anti-democratic and unAmerican in her life.

Now hundreds of thousands of liberals around the nation join in protests and even riots to proclaim, “Not my president” and “Dump Trump.” A few have created petitions for their liberal states to secede from the union. Still others are petitioning the electoral college with over 4,000,000 signatures to overthrow the election. They were fine with the electoral college when they were certain that Hillary would win due to the electoral vote outweighing the broad sweep of populist votes that Trump might get, but now that the candidates’ roles are reversed, they say the centuries-old electoral college needs to be abolished.

Of course the snowflakes are also all melting down because they were brought up in a sheltered existence where everyone gets a prize just for participating. Because there were no losers in snowflake schools, this is their first experience of what real-world losing feels like. In the stark world they are just entering outside the educational womb, losing just means you get nothing of what you wanted. Naturally, they’re balling about that. For those who have continued on to college, the womb is trying to wrap itself around them one last time by giving them puppies, coloring books, hot chocolate and therapy.

Liberals organize for anarchy because of biased media coverage about Trump

Says one group that hated Trump for refusing to say he would accept the election results before knowing why and how the results came out…

#DisruptJ20 call[s] for a bold mobilization against the inauguration of Donald Trump on January 20, 2017: On Friday, January 20, 2017, Donald Trump will be inaugurated as President of the United States. We call on all people of good conscience to join in disrupting the ceremonies. If Trump is to be inaugurated at all, let it happen behind closed doors, showing the true face of the security state Trump will preside over. It must be made clear to the whole world that the vast majority of people in the United States do not support his presidency or consent to his rule…. We must take to the streets and protest, blockade, disrupt, intervene, sit in, walk out, rise up, and make more noise and good trouble than the establishment can bear. The parade must be stopped. ~ Zero Hedge

In their video, this group even goes as far as to say,

Trump’s success proves the bankruptcy of representative democracy. Rather than using the democratic process as an alibi for inaction, we must show that no election could legitimize his agenda.

This is beyond hypocrisy. It’s a blatant call for anarchy. As the video title says, it is a call to make sure there is “no peaceful transition” of power. This group appears to be hoping the National Guard will be called out in order to create the appearance that Trump can only “rule,” as they put it, through a police state. Hypercritically, they are the ones doing their best already to make sure that is how it plays out.

I lay the blame for this organized chaos on the liberal mainstream media. It is the outcome to their constant distorted replays of Trump’s words. Yes, Trump’s huge mouth lends itself to easy trouble because he says things as boisterously and provocatively as possible in order to get free media coverage, but the media readily bought into all of that because it sells, and they even hyped what he said every time they replayed it to make sure it sold even more and that it suited their goal of saving the liberal establishment. The cost of that is now peace itself because of the fear factor that the irresponsible media sought to create in hopes of preventing Trump from being elected (and to make bigger headlines).

For example, when Trump said we should send Mexican rapists home, the media constantly replayed that with commentary that turned it into “all Mexicans are rapists,” creating fear in the Mexican-American community that Trump hates Mexicans. What he really said was that a handful of specific Mexicans who were known by the Obama Administration to be convicted criminal rapists and who had been allowed to remain in the US and who subsequently raped American women, should have been sent home before that could ever happen. He was highlighting the shear stupidity of a government that is so extreme in its refusal to deport illegal aliens that it even insists on keeping rapists here. But media bias created a flurry of fear out of Trump’s boisterous words.

Likewise, Trump NEVER said that he has grabbed women inappropriately, though that is what the liberal media kept saying he said. In the now infamous video Trump switches from saying how he tried to seduce a woman and failed (hardly bragging) to saying he was surprised he failed because celebrities can usually get away with outrageous actions, and then he states the most outrageous thing that comes to his mind. He notably switches from saying “I did” to saying “you can” at exactly that point. In other words, “It was amazing I couldn’t seduce her with my offer of a buying spree for her apartment when celebrities can usually get away with doing any outrageous thing they want.”

The fact is that celebrities like rock stars often DO get anything they want sexually. There are always gold diggers and fanatics who throw themselves at celebrities. These are women who would wrap their legs around a celebrity who did what Trump talked about and say, “Bring it on, Big Boy.” This was far from the mea culpa that the media made it into.

The video above takes off with these media misrepresentations as if all of them were fact. So, the media is more culpable than simply being a biased bystander. It has created the narrative that has fueled this fear and rage across the country. As if Trump’s mouth was not provocative enough, the biased media distorted his words at every turn.

Says one person in a comment section that caught my eye…

Students’ reaction is NOT about losing an election. It’s because these people watch media, and the (Clinton-controlled) media spent the last four months working overtime to program everyone in the country that Trump is a soulless monster come to eat them and their families, roasting their babies on a spit while laughing, and so on.

This emotional programming has been extremely effective. That’s why people are rioting now. Not because they aren’t good losers, but because they’ve been successfully emotionally programmed by the Clinton Campaign’s media arm (CNN, CNBC, and millions of scary social media posts), who are very good at what they do.

What’s more, the “bad element” (the real scumbag racist nazis out there) have also been convinced by this same Clinton emotional-programming campaign that Trump is on their side, so they are emboldened to act badly! A win-win, from HRC’s standpoint, but a lose-lose from civil society’s view. ~ Peak Prosperity

I’d say it is both. Because the snowflakes were raised to melt at room temperature, they are highly subject to the fear-mongering of the mass media, which has whipped them up into mass hysteria.

Trump might not have accepted the election results if he saw irregularities that looked like evidence of rigging. If so, he might have gone to court — all within his legal rights — just as the Democrats did when Al Gore refused to accept the election results based on irregularities. These people, however, are doing their best to set up blockades to make sure the president-elect can’t even be inaugurated. They’re not just going to protest the election results; they’re organizing to try to prevent the results from playing out!

Media bias continues unabated distortions this past week

Above the pandemonium, the most egregious thing amid all of this hypocrisy that I have witnessed is the disingenuous coverage by the “progressive” press about the liberal riots and violence against Trump supporters.

ABC News mentioned in one report that Trump had not done much to ask his supporters to stop violence, though in fact, he had asked it directly twice on 60-Minutes, which got a lot of replays. Noticeably absent was any statement by ABC News about how neither Hillary nor Obama have done anything to ask their supporters to stop acts of hatred and violence, even though it appears to be their supporters who are creating the lion’s share of violence. Obama, while in Berlin this past week, actually encouraged protestors to keep up their protests without saying a word about ending their violence. He spoke only of the nobility of their protests:

One of the great things about our democracy is that it expresses itself in all sorts of ways…. I would not advise people who feel strongly or who are concerned about some of the issues that have been raised during the course of the campaign … I wouldn’t advise them to be silent. What I would advise is that … organizing matters…. Do not take for granted our systems of government and our way of life. ~ Fox News

President Obama was practically a pep-rally speaker for the protests, even though some have been quite violent. He has refused to ask protestors to stop their violence even after being asked to help quell the storm:

Protests have broken out in cities across the country since Trump’s upset victory last Tuesday. Some have been peaceful, but there have been incidents of violence — and a demonstration last Thursday in Portland escalated into a destructive riot. Trump’s campaign manager Kellyanne Conway repeatedly has called for Obama to speak out on the unrest. “I am calling for responsibility and decency. I hope President Obama says, ‘Cut it out,'” she told “Fox News Sunday.” Obama, though, so far has not done so, speaking mostly in generalities. ~ Fox News

Not just in generalities but in praise of the protests with no hint whatsoever that the primary perpetrators of violence need to stop it. Yet Trump — who said specifically to his own supporters, if any were engaged in such acts, “stop it” — was portrayed by the press as solely being the one who has not said enough to curb violence. The bias in the coverage is the worst I’ve ever witnessed.

Lying through statistics about hate crimes

Toward the end of the week, news stories decried the uptick in hate crimes since Trump was elected, often sounding as if the crimes were Trump’s fault. ABC reported, for example, that “many of the incidents made reference to Donald Trump.” What they didn’t say is that much of the violent uptick has been against Trump and his supporters. The highest reported increase, for example, was in the liberal state of California.

The media has also hugely exaggerated the significance of the increase:

Overall, the total number of hate crimes against all groups reported by law enforcement agencies to the FBI increased from 5,479 in 2014 to 5,850 last year. That remains far lower than the numbers seen in the early 2000s, but the FBI release comes amid numerous reports of attacks nationwide based on race and religion following last week’s presidential election. ~ ABC News

Yeah, mostly attacks based on race or religion made against Trump supporters by people who feel afraid that all Trump supporters are bigots because of how the media has played Trump’s comments. The increase the FBI reported includes all the crimes being committed by people of color against White Trump supporters, and still it was only a 7% increase in 2015 (before the presidential campaigns kicked into high gear). It does not include any increase that may have happened in 2016, so there is no justification in attaching the report to the recent violence.

The increase has been presented as if it proves the rhetoric of the Trump campaign during 2015 may have caused a surge of violence. What isn’t said is that in 2013 hate crimes dropped from 6,573 to 5,928 and then dropped again in 2014 to 5,479. So, a rise of less than 400 in 2015 against a drop of about 500 or more in each of the two preceding years is a change that is within the level of normal ups and downs.

No one got all excited about any “huge improvements” in hate crimes in 2013 and 2014; so there is even less reason to be alarmed about a “huge increase” in 2015, given that the change is less than either of the two preceding years. In fact, in 1995, the FBI reported 7,947 hate-crime incidents, and the annual average since then has been 7,573. So, what the media should have reported was that the campaign year of 2015 was 1700 incidents lower than the annual average for hate crimes during the years that the FBI has collected hate-crime statistics (23% lower than the average year)! Moreover, the years have ranged from about 5,000 to 11,500. So, last year wasn’t just well below average but only about half of the peak year.

And that’s how you LIE with statistics! All to make it look as if Trump’s candidacy caused the upsurge.

Some of the liberal commentators this week particularly spoke out against what they said was a huge rise in hate crimes against Muslims — a 67% increase over the previous year! However, a look at the numbers colors the story a little differently there, too: Last year, there were 257 reported incidents of anti-Muslim crimes compared to 154 the year before. That’s a rise of 103 incidents — two more incidents per state for the entire year. When numbers are as small to begin with as 154 (out of about 6,000 hate crimes), its easy to see a 67% increase.

While even an increase of two per state is certainly not good, it is not the outbreak of hatred by Trump supporters that the media kept presenting this week. For a nation with over 320,000,000 people, I think a total of 257 hateful incidents against Muslims is an extraordinarily small number. Incidences against Jews were much higher, and Trump has never said anything against Jews and is more pro-Israel than Obama. You’ll also find far higher incidents of one Muslim sect against another in nearly any Muslim country of your choosing. Any number is too big in that there should be none whatsoever, but that would be only in a perfect world.

Hate crimes against Muslims accounted for 12% of all hate crimes on average between 2001 and 2012), while hate crimes against Christians counted for 8%; but hate crimes against Jews accounted for 66%. The percentage of hate crimes that are directed against each religious group, however, has decreased between 2001 and 2012 compared to the average from 1995-2000, except for Muslims, where it has increased from 2% to 12%.

So, yes, hatred toward Muslims has taken an increasing portion of all hate crimes as hate crimes to other groups has dropped, but it has been increasing for years since 9/11 in 2001, not because of anything Donald Trump has said. For example, hate crimes against Muslims rose 14% in 2014 over 2013 when Donald Trump wasn’t even campaigning. I would suggest it is quite likely that the increase in hatred toward Muslims has far more to do with 9/11 and more recently with the atrocities of ISIS, such as ISIS beheadings, that have happened all over the world, particularly in Paris, in the last couple of years than it has to do with Donald Trump’s rhetoric.

Yet, the media kept trumping up the “surge” of hate crimes this past week because FBI statistics just came out. (These are all FBI statistics, which is charged with compiling statistics for all hate crimes in the US.) The liberal-biased media has attributed the rise in FBI statistics to Trump just because of the reports coincidence with Donald Trump’s victory in the presidential election.

How media bias slanted stories of violence against Trump

Quotes like the following were provided by the liberally biased media as the explanation for the latest FBI statistics:

“We’ve seen how words from public figures like Donald Trump translate into violence,” said Mark Potok with the Southern Poverty Law Center, which tracks hate groups in the U.S. ~ ABC News

Actually, however, the FBI’s report stated that the number of hate groups went down in 2015, and it showed that liberal California has the highest number of hate groups of all states.

Sure last week, not included in any of the statistics that were all about 2015 was much more violent than most weeks, but most of the violence was perpetrated by those who don’t like Trump. Some of it was directly against Trump supporters, and some was simply against anyone or any business in the vicinity of an anti-Trump protest/riot. The media said very little about who last week’s increase in violence was against.

Look, too, at the kinds of incidents the liberal media is reporting as acts of hate:

Two students at a vocational school in York County, Pennsylvania, held a Donald Trump sign in a hallway as someone shouted “white power.” ~ ABC News

While I don’t like that statement because there is undoubtedly racial prejudice behind it, can you imagine that the press would call it an act of hatred if two students were holding a Hillary Clinton sign in a hallway as someone shouted “Black power?” Never in a million years would the hypocritical left with all of its double standards call that an act of racism or hatred. Thus, the press perennially creates the illusion that all racism is one-sided.

It should also be noted that much of the increase in hate crimes was not in response to Donald Trump’s incendiary rhetoric but was backlash to Barrack Obama’s changes on gay/gender issues and his support of Muslims. Not that that makes the crimes OK or justified in any sense, but just that those crimes have nothing to do with Donald Trump; but that was never mentioned in the several stories out this past week about the rise in hate crimes over the past two years.

Portland under seige, liberals attack Trump supporters across the nation

So-called protests against Trump’s election in Portland are really all-out riots that have included, setting buildings on fire, blocking off trains and roadways with physical barricades, breaking windows, other acts of vandalism, and assaults, even a shooting. Naturally, the nation’s most liberal cities have been the most violent. ~ ABC News

[Portland] Trail Blazers All-Star guard Damian Lillard is questioning the damage and violence taking place in Portland, Oregon, during anti-Donald Trump protests, saying that isn’t the proper way to go about implementing change. “I think it’s very unfortunate that people have done some of the things they have done during the protest. A lot of harm and damage has been done,” Lillard told ESPN on Saturday. “I do understand their frustration, and I commend people wanting to come together for some kind of change. Tearing apart your own city just isn’t the place to begin, and also making your own city less of a safe place isn’t the answer.” ~ ABC News

And these people — some of whom attacked police with fire and projectiles and attacked a TV crew — are the ones who are claiming they don’t feel safe because Trump was elected. I think the real truth is that people should not feel safe because of how these people are violently rejecting the election results.

One of the biggest reasons people have protested Trump is because they thought his rhetoric was making them less safe. They were certain Trump’s supporters would become violent if Trump lost and his supporters believed him that the election was rigged. Now, liberals claim the election was rigged because the electoral college didn’t match the popular vote (something they’ve had their entire lifetimes to change if they think it is rigged against them but were fine with when they were certain it would tip the balances in Hillary’s favor).

Earlier this week I reported on two school kids in different schools who were beat up because they supported Donald Trump and about a White guy pulled out of his car and viciously attacked by a group of laughing black people, solely because he was a Trump supporter. Those videos got no play in the mainstream media that I saw. This was covered only by the alternative media that liberals revile.

Activist who claimed that “Trump cannot divide us with his racism,” divided Washington by cutting off all access to the Lincoln Memorial and Pennsylvania Avenue to anyone but themselves. ~ ABC News

In Indianapolis, protestors threw rocks at police officers, injuring two.

Not all that Twitters is gold

On the other hand, numerous alternative media sites in the past week carried stories that were nothing more than unsubstantiated rumors. They did so because they were too quick to follow their own biases. These rumors, often based on just some individual’s tweet with a photo, claimed that organizations sponsored by George Soros took out out ads on Craigslist, offering to pay people to protest and that they bussed these hired protestors into cities. These kinds of rumors flew around a lot during the campaign and especially last week, but says they are all untrue, and that does appear to be the case as the support for each rumor is in each case speculation about what was behind the ad or what was behind the photo:

Photographs showing long lines of buses were shared with the untrue claim that they were used to ship paid anti-Trump protesters to various cities. ~

Craigslist ads for legitimate canvassing jobs were mistaken by some conspiracists as seeking to recruit paid protesters to swarm Donald Trump rallies. ~ gave the same analysis:

It’s been rumored that George Soros and pro-Clinton groups funded protests and paid professional protesters after Donald Trump was elected president. The Truth: We haven’t found any proof that George Soros or pro-Clinton groups have funded anti-Trump protests…. A man named Eric Tucker created a stir on social media when he posted multiple photos of charter buses with the caption “Anti-Trump protestors in Austin today are not as organic as they seem. Here are the busses they came in.” #fakeprotests… A FOX affiliate in Austin found that the charter buses were actually being used to shuttle people from hotels to the Tableau Conference being held at the Austin Convention Center. The buses had nothing to do with protests….

Before Eric Tucker took the tweet down Friday, it had nearly 17,000 retweets and became part of a national controversy. “I thought going on Twitter was not a big deal, I thought, I have 40 followers, I post twice a year on Twitter, I’m not a professional blogger at all,” Tucker said.

Tucker said seeing a bunch of charter buses lined up on 5th Street near Waller on Wednesday, coincidentally around the same time an anti-Trump rally was being held in downtown Austin he said was unusual. So he took to Twitter with the claims the buses were being used to ship in protesters. “I hadn’t really fact checked at all, it was just all kind of circumstantial and then before I know it, it’s a story, I am over 10,000 tweets by the next day. ~

Wikileaks emails, however, did show that Democratic Party campaigners bussed illegal aliens from poll to poll to vote over and over. One commentator, Alan Colmes said last week that never happened, but the DNC’s own emails say it did. I guess those working for the DNC were just lying to each other about their activities.

Why were there no interviews in the mainstream media with those who wrote the emails, asking why they wrote such things? Why was there no investigation into how many emails there are that show these illegal actions? This is why we need the “fifth estate,” but we also need it to be careful and honest.

The Fifth Estate is a socio-cultural reference to groupings of outlier viewpoints in contemporary society, and is most associated with bloggers, journalists publishing in non-mainstream media outlets, and the social media. The “Fifth” Estate extends the sequence of the three classical Estates of the Realm and the preceding Fourth Estate, essentially the mainstream press. The use of “fifth estate” dates to the 1960s counterculture, and in particular the influential The Fifth Estate, an underground newspaper first published in Detroit in 1965. ~ Wikipedia

As often happens in human affairs, the radical journalists who made up the fifth estate of the 1960s have become the fourth estate of the new establishment. And that’s why a new alternative media is rising to fill the intellectual vacuum and right the balance; but such sites often jump to publish rumors as news because the rumor suits their own cause. We need to be careful and honest about our facts and not jump to conclusions if we want to build credibility.

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David Haggith

David Haggith
The Great Recession Blog

David Haggith

My path to writing this blog began as a personal journey. Prior to the start of this so-called “Great Recession,” my ex-wife had a family home that was an inheritance from her mother. I worked as a property manger at the time, and near the end of 2007, I could tell from rumblings in the industry that the U.S. housing market was on the verge of catastrophic collapse. I urged her to press her brothers to sell the family home before prices dropped. The house went on the market and sold right away — and just three months before Bear-Stearns and others crashed, taking the U.S. housing market down for the tumble. Her family sold at the peak of the market.

Copyright © 2015-2016 David Haggith

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Published at Sun, 20 Nov 2016 18:24:56 +0000

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Investors bet Trump stimulus will boost U.S. stocks

U.S. President elect Donald Trump arrives to address supporters with his son Barron and wife Melania  at election night rally in Manhattan, New York, U.S., November 9, 2016. REUTERS/Brendan McDermid

U.S. President elect Donald Trump arrives to address supporters with his son Barron and wife Melania at election night rally in Manhattan, New York, U.S., November 9, 2016. REUTERS/Brendan McDermid

Investors bet Trump stimulus will boost U.S. stocks

By David Randall and Jonathan Stempel

U.S. voters’ decision to install Donald Trump in the White House may extend the life of the aging, seven-year bull market in U.S. stocks.

That is the consensus of prominent investors attending this week’s Reuters Global Investment Outlook Summit.

Expectations that Trump will successfully engineer massive new infrastructure spending, slash corporate and some personal income taxes, and wipe out a slew of regulations may boost prospects for U.S. stocks, and end what some investors call a three-decade bull market in bonds.

“The earnings impact of President-elect Trump will outweigh whatever increase in bond interest rates comes about,” said Steven Einhorn, vice chairman of hedge fund Omega Advisors Inc, which invests about $4 billion.

Einhorn expects U.S. stocks to return as much as 8 percent in 2017, including dividends. “The risks are to the upside for the (Standard & Poor’s 500) rather than the downside,” he said.

As the post-election, double-digit percentage surge in bank stock prices suggests, investors expect Trump to bolster that sector by reducing its regulatory burdens.

They also said infrastructure spending could boost old-line sectors such as coal and steel.

“I do think that Donald will do an excellent job,” said Carl Icahn, the billionaire activist investor and one of Trump’s earliest Wall Street supporters.

But even Icahn, who left what became Trump’s victory party in the early morning on Nov. 9 to make a nearly $1 billion stock bet, expressed near-term caution about stock markets, citing concern about the overall economy.

“It has run ahead of itself,” he said. “There are going to be bumps along the road. You know, this is a big ship that you’ve got to really turn around. You’ve got to get this economy back on track, and I don’t think it is.”



Investors are betting that will change and poured a net $23.6 billion into U.S. stock funds in the latest week, according to Lipper data.

Such enthusiasm may in part reflect investors’ bad habit of chasing recent performance.

Or, it may reflect their desire for a longer-term commitment to stocks.

“The first question is whether they’ve actually fallen in love, or whether it’s sort of a one-night stand,” said Richard Bernstein, chief executive of Richard Bernstein Advisors LLC in New York. “Right now it’s more of a one-night stand… You haven’t seen the lasting shifts in asset allocation.”

Bruce Richards, chief executive of hedge fund Marathon Asset Management, which invests $13 billion, said Trump’s victory could boost gross domestic product growth by 1 percentage point, and has made him bullish on “the whole steel complex.”

The Republican sweep of Congress may also bode well.

“I don’t think the market would have done this with a split Congress,” said Jason Karp, who runs the $3.8 billion hedge fund Tourbillon Capital Partners LP in New York. He said financial stocks could rise 50 percent more, despite their recent gains.

But Dawn Fitzpatrick, global head of equities, multi-asset and the O’Connor hedge fund businesses at UBS Asset Management, said there could be a near-term pullback, especially if more regulations survive than some hope.

Several guests also questioned how thoroughly Trump would, or would want to, follow through on his tough-on-trade rhetoric.

“You’re going to hurt 70 percent of the economy” with big new trade barriers, Bernstein said. “Do you really want to pay $1,000 for your big screen TV instead of $250? I don’t think you’re going to find too many people who want to do that.”



Many summit attendees said investors need to take a fresh look at how bonds fit into their portfolios, and to steel themselves for possible losses in 2017.

“We have a set of investors that has been trained to buy bonds for capital appreciation, and buy equities based on yield,” Fitzpatrick said. “That behavior is going to have to be unlearned.”

Higher yields, and lower prices, are likely for many bond classes, ranging from U.S. Treasuries to junk bonds.

Some of that has already occurred, with the yield on the benchmark 10-year U.S. Treasury note surging above 2.3 percent from 1.86 percent on Nov. 8, and below 1.4 percent in July.

Kathleen Gaffney, who helps run investment-grade fixed income at Eaton Vance Management in Boston, which oversees $343 billion, said she is holding an above-average 11 percent cash stake to guard against volatility.

Josh Brown, chief executive of Ritholtz Wealth Management in New York, said investors should focus on building “durable” portfolios to ride out whatever happens.

“Behavior is going to be more determinative of our clients’ returns,” he said. “We can’t control the markets, we can’t control what the Fed’s going to do, we can’t control who’s elected, but we can control our responses.”

(Additional reporting by Lawrence Delevingne, Sam Forgione, Svea Herbst-Bayliss and Trevor Hunnicutt; Editing by Jennifer Ablan, Bernard Orr)

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Published at Fri, 18 Nov 2016 21:05:03 +0000

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Goldman: “Market expectations of quick fiscal expansion may be running ahead of political and legislative realities”


by PredragKezic from pixabay

Goldman: “Market expectations of quick fiscal expansion may be running ahead of political and legislative realities”

by Bill McBride on 11/17/2016 04:41:00 PM

 A few brief excerpts from analysis by Goldman Sachs economist Alec Phillips: A Fiscal Boost in 2017: How Much, How Fast?

Tax reform has political momentum, which is likely to increase the budget deficit... In light of the election result, we assume that the deficit will increase by more than previously expected. Specifically, we assume that fiscal policy choices under the next Congress will increase the budget deficit by around 0.75% of GDP, or around $150bn, in 2018, and similar amounts over the next few years.

but the market is more focused on fiscal “stimulus” than Congress is. There are risks in both directions to our fiscal assumptions, but we note that financial markets appear to be more focused on fiscal “stimulus” than lawmakers are. …

Both sides support some type of infrastructure program, but neither side seems enthusiastic. Although President-elect Trump has highlighted infrastructure among the priorities he hopes to address, the reaction from Congressional Republicans has been tepid. While some believe the inclusion of an infrastructure plan in the tax legislation that Congress is expected to consider in 2017 could increase Democratic support for the combined package, others are wary of proposals to use the proceeds from taxing the unrepatriated profits of US multinationals to pay for it. Instead, Republican lawmakers appear more inclined to use the bulk of the proceeds from taxing those overseas earnings to offset the budgetary effects of reducing statutory tax rates.

Obamacare “repeal” seems unlikely to change the fiscal picture for 2017 or even 2018. Congress will face a number of challenges in reforming the ACA in 2017, and we would expect that the process to devise a replacement plan will take until late 2017, if not 2018. We would also expect whatever replaces the current system to take effect after the midterm congressional elections, in 2019. This could lead to uncertainty regarding the changes that might be made, but we expect that whatever changes to the ACA might ultimately occur, they would probably not take effect until 2018 at the earliest and more likely 2019.

CR Note: The “infrastructure” proposal that many investors are focusing on is really a proposal for about $100+ billion in tax credits to spur private investment in infrastructure (I’ve seen some people talking about $1 trillion in infrastructure investment – but that is the projected size of the private investment, not the proposed government spending).  This proposal is actually very modest in terms of a fiscal boost.   More analysis to come when we see the actual proposals, but I think analysts might be overestimating the boost from government spending in 2017.


by Bill McBride on 11/17/2016 04:41:00 PM

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Published at Thu, 17 Nov 2016 21:41:00 +0000

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Trump victory pushing U.S. fund managers into small-cap shares


U.S. President-elect Donald Trump in Manchester, New Hampshire, U.S., October 28, 2016.REUTERS/Carlo Allegri/File Photo

Trump victory pushing U.S. fund managers into small-cap shares

By David Randall | NEW YORK

President-elect Donald Trump’s victory last week is pushing U.S. fund managers into the shares of small, domestic-oriented companies that they expect to benefit should Trump cut back on regulations and renegotiate free trade agreements as promised.

Already, the Russell 2000, the benchmark for small companies in the United States, is up nearly 12 percent over the past five trading days, a performance nearly triple the 4.4 percent gain of the large-cap S&P 500 over the same time. Fund managers say they expect the small-cap rally to continue into 2017 as the incoming Trump administration begins to put policies in place.

“Right now this is the hope rally, but it will be a while before you have any real changes out there that flow through to earnings,” said Barry James, president of Dayton, Ohio-based James Advantage Funds.

James is moving approximately 40 percent of his multi-cap fund into small-cap shares, up from 10 percent earlier this year, by buying companies such as Neenah Paper Inc, which manufacturers filtration and specialty paper in plants in Wisconsin and Ohio, and outsourcing company Convergys Corp, which has its primary call centers in Florida and Ohio.

The move into small-caps comes at a time when the category had underperformed larger-caps over the past one and three years, leaving valuations more attractive regardless of the outcome of the election, said Martin Jarzebowski, a portfolio manager at Federated Investors in New York.

Trump’s administration is expected to cut back on regulations across industries, leading to more mergers and acquisition activity, Jarzebowski said.

“We’re looking at adding acquisition targets” in sectors such as industrials and materials, Jarzebowski said.

Yet Trump’s administration will also likely bring higher market volatility, which would hurt small-caps, which often are thought of as riskier than larger companies, said Steven DeSanctis, an equity strategist at Jefferies in New York.

At the same time, small-cap exchange traded funds brought in $4.2 billion in the week since Trump’s victory, DeSanctis added, which was the biggest inflow since May 2008 and suggests that markets already have priced in any benefits to the category.

Tim Cunningham, a portfolio manager at Santa Fe, New Mexico-based Thornburg Investments, said he was moving away from dividend-stocks like Molson Coors Brewing Corp and adding to his positions in regional banks such as Silicon Valley Bank-parent SVB Financial Group that should benefit from higher interest rates.

“Even with a small increase in rates, it will immediately see a big increase in its earnings. That’s basically pure margin,” Cunningham said.

Cunningham has also been adding to his position in energy-drink company Monster Beverage Corp thanks to its international growth. The company’s shares are down 6.7 percent over the past five days after voters in Boulder, Colorado, Cook County, Illinois and the San Francisco Bay Area passed new taxes on sugar-sweetened beverages.

He is also looking to add to large-cap technology shares such as Inc, Facebook Inc and Google-parent Alphabet Inc that have been hurt by concerns that the incoming Trump administration could dampen their foreign sales and make it harder to recruit and retain talented engineers.

“These are dominant businesses with huge barriers to entry, and we could be getting an opportunity if they continue to pull back,” Cunningham said.

(Reporting by David Randall; Editing by Will Dunham)

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Published at Wed, 16 Nov 2016 21:47:14 +0000

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A post-Trump SEC could shake up current policy


A general exterior view of the U.S. Securities and Exchange Commission (SEC) headquarters in Washington, June 24, 2011.REUTERS/Jonathan Ernst

A post-Trump SEC could shake up current policy

By Sarah N. Lynch | WASHINGTON

It will be a new day at the U.S. Securities and Exchange Commission after President-elect Donald Trump installs his choice to run the agency.

With Trump’s transition team already in regulatory-relief mode and promising to revamp the Dodd-Frank financial reform legislation, some rules already are marked for death or dialback.

Expected on the chopping block soon after Trump takes the oath of office is a proposal that would require companies to disclose pay ratios between their CEOs and employees. Another would require companies to disclose whether their products contain conflict minerals — minerals that were mined in a war-torn region of Africa.

Dead for now is any prospect of the SEC approving a tough fiduciary rule for financial advisers, say policy experts.

Trump’s decision to tap former Republican SEC Commissioner Paul Atkins to help manage the Trump team’s transition efforts at the SEC and other financial agencies offers a window into some other changes that could be in store. Atkins, the founder of the regulatory consulting firm Patomak Global Partners, is viewed by some to be a top contender for the position of SEC chairman itself, though as the transition head he could also recommend someone else for that job.

Atkins’ well-known conservative views on everything from enforcement penalties to corporate governance are likely to be reflected in the SEC’s agenda.

Here are five policy areas likely to change.


Paul Atkins was a staunch critic of the Public Company Accounting Oversight Board (PCAOB), a body created after the Enron accounting scandal to police and write new rules for corporate auditors.

Atkins raised concerns about the board’s budget and high salaries, and advocated against prescriptive accounting rules that he felt constrained auditors from making professional judgments.

Recently, Republicans have criticized the PCAOB for taking on more progressive causes, such as proposing companies rotate auditors to reduce conflicts or requiring accounting firms to disclose the name of individual partners working on company audits.

The PCAOB’s chairman Jim Doty, who advocated for the controversial reform measures, will almost certainly not be re-appointed by the incoming SEC chair.

“I expect that a new Chair will refocus the Board’s standard-setting agenda on the core audit function,” said Hunton & Williams Partner Scott Kimpel. “I would expect a return to the basics.”


The topic of whether to impose corporate penalties against a company would come under scrutiny.

During his time at the SEC, Atkins advocated for an enforcement approach that he said did not unduly punish corporate shareholders that had already suffered from the misconduct. He called for the SEC to carefully weigh who had profited from the bad behavior, and urged the SEC to hold individuals accountable for their actions.


Atkins has long opined that the SEC’s rules requiring “best price” execution of stock trades actually skews the market by causing fragmentation and harming price discovery by directing orders away from traditional stock exchanges into “dark pool” trading platforms.

As a commissioner, Paul Atkins was critical of the rule called Regulation National Market System (NMS), saying it could impede true price discovery and encourage gaming of the system.

In January 2016 he wrote an opinion piece in the Wall Street Journal calling for the SEC to do major surgery on the rule, allowing considerations beyond ‘best price’ and speed to determine order flow.


The Dodd-Frank law gave the SEC newfound powers to reward whistleblowers who come forward with tips of corporate malfeasance.

From August 2011 through fiscal year 2015, the SEC has received more than 14,000 tips, and by August of 2016, the program had given out more than $100 million in rewards.

But corporate America has long disliked the part of the rule that protects whistleblowers from having to report wrongdoing to their own companies before they tip off the government.

In 2011, Atkins urged the SEC to require whistleblowers to report internally first, saying a failure to do so could undermine compliance programs.

Whether this will change remains to be seen, especially in the wake of the Wells Fargo & Co scandal, where employees who reported internally about the opening of unauthorized accounts were fired.

Atkins “cares deeply about the commission and its enforcement program,” said Jordan Thomas, a whistleblower attorney at Labaton Sucharow who previously worked in the SEC’s enforcement division during Atkins’ tenure.

“I find it very hard to believe that he would support undermining such a successful program.”


Atkins was a strong proponent of the 2012 Jump Start Our Business Startups Act, which scaled back some SEC rules to help smaller companies raise capital.

In testimony on Capitol Hill, Atkins advocated for additional steps to be taken to help smaller companies, including rules to help create venture exchanges for mid-cap stocks and broadening efforts to exempt private capital-raising rules from regulation by states.

(Reporting by Sarah N. Lynch; editing by Linda Stern and Diane Craft)

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Published at Wed, 16 Nov 2016 09:35:06 +0000

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TEXT-Britain’s leaked Brexit memo


By MIH83 from Pixabay

TEXT-Britain’s leaked Brexit memo

Nov 15 The following is a copy of a
leaked memo on Brexit prepared for the Cabinet Office. It was
printed by The Times newspaper.

May’s office said it did not recognise the claims made in
the memo.

“This is not a government report and we don’t recognise the
claims made in it,” a spokesman for May’s office said. “We are
focused on getting on with the job of delivering Brexit and
making a success of it.”

The following is the memo as published by The Times:


Brexit update as of 7th November 2016

This note summarises the current state of play on Brexit
issues in Whitehall in the critical inter-related domains of
politics, government and industry.


The Prime Minister’s over-riding objective has been to keep
her party from repeating its history of splitting 4 times in the
past 200 years over global trade – each time being out of power
for 15-30 years. The public stance of Government is orientated
primarily to its own supporters, with industry in particular
barely being on the radarscreen – yet.

The Government’s appeal to the Supreme Court has to be seen
in this light – it is about avoiding any more public debate than
necessary because it will expose splits within the predominantly
“remain” Conservative MPs and intensify the pressure from
predominantly “leave” constituency parties. A General Election
is only a last resort for 3 reasons – boundary changes (that
favour the Conservatives) will not be effective until 2019; the
Fixed Term Parliaments Act obstructs Prime Ministerial freedom
to call an election at will; and it may suit major decision
makers to slowly shift away from more difficult aspects of
Brexit on the grounds that Parliament has forced them to do so.

The divisions within the Cabinet are between the 3
Brexiteers on one side and Philip Hammond/Greg Clark on the
other side. The Prime Minister is rapidly acquiring the
reputation of drawing in decisions and details to settle matters
herself – which is unlikely to be sustainable. Overall, it
appears best to judge who is winning the debate by assuming that
the noisiest individuals have lost the intra-Government debate
and are stirring up external supporters.

The Supreme Court appears likely to delay its ruling until
early January and, assuming it sustains the High Court, a short
enabling bill will then be submitted to Parliament, permitting
the Government to invoke Article 50 in March as planned. The
Government will probably be able to face down wrecking
amendments, but the debate in Parliament will certainly shift
expectations of what will be achieved/sellable in Brexit
negotiations. Remain supporters can be expected to reserve their
fire until winners and losers emerge from negotiation and the
political atmosphere allows more sophisticated assessment of



Individual Departments have been busily developing their
projects to implement Brexit, resulting in well over 500
projects, which are beyond the capacity and capability of
Government to execute quickly. One Department estimates that it
needs a 40% increase in staff to cope with its Brexit projects.
In other words, every Department has developed a “bottom up”
plan of what the impact of Brexit could be – and its plan to
cope with the “worst case”. Although necessary, this falls
considerably short of having a “Government plan for Brexit”
because it has no prioritisation and no link to the overall
negotiation strategy.

However, it may be 6 months before there is a view on
priorities/negotiation strategy as the political situation in
the UK and the EU evolves. Despite extended debate among
Permanent Secretaries, no common strategy has emerged, in part
because the potential scope and negotiating positions have to be
curtailed before realistic planning can happen, in part because
of the divisions within the Cabinet. It is likely that the
senior ranks in the Civil Service will feel compelled to present
potential high level plan(s) to avoid further drift.

Departments are struggling to come up to speed on the
potential Brexit effects on industry. This is due to starting
from a relatively low base of insight and also due to
fragmentation – Treasury “owning” financial services, DH-BEIS
both covering life sciences, DCMS for telecoms, BEIS most other
industries, DIT building parallel capability focussed on trade

Capability-building is making slow progress, partly through
deliberate control by the Cabinet Office and partly from
Treasury’s opening negotiating position that Departments will
meet Brexit costs from existing settlements – although no one is
treating that position as sustainable. Expectations of increased
headcount are in the 10-30,000 range. Initiatives to build
capability are getting off the ground – the Diplomatic Academy
is providing trade training programmes, Cabinet Office is
discussing system-wide capability programmes.

The Autumn Statement on 23rd November is expected to provide
some headlines in terms of infrastructure investment, making the
UK fit for growth and the inclusive economy. It will not provide
resources for the Civil Service to grow its Brexit capacity and
capability. In fact, we are more likely to see a further squeeze
on Departmental operating costs to compensate for new spending.



Government expects lobbying on 3 levels to continue:

1. Company-specific decisions – the Nissan investment
decision is a prime example. These are viewed as major
opportunities/threats for Government. Other major players can be
expected to, similar to Nissan, point a gun at the Government’s

2. Industry insights – the major challenge for industry and
Government are “the unknown unknowns” where industry has to
educate Government fast on the most important negotiating issues
– e.g., they think they know about talent, but know they know
little about data.

3. Overall business concerns – the province of CBI and
largely dealt with as a PR issue.

Industry has 2 unpleasant realisations – first, that the
Government’s priority remains its political survival, not the
economy – second, that there will be no clear economic-Brexit
strategy any time soon because it is being developed on a
case-by-case basis as specific decisions are forced on

(Reporting by Guy Faulconbridge; editing by John Stonestreet)

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Trump University asks for trial delay until after inauguration


Republican presidential nominee Donald Trump arrives for his election night rally at the New York Hilton Midtown in Manhattan, New York, U.S., November 9, 2016.REUTERS/Andrew Kelly/File Photo

Trump University asks for trial delay until after inauguration

By Tracy Rucinski | CHICAGO

U.S. President-elect Donald Trump has requested that a trial over a lawsuit by former students of his now-defunct Trump University be put on hold until after the presidential inauguration, according to a motion filed by his lawyer late Saturday.

A trial in federal court in San Diego over former Trump University students’ claims that they were defrauded by a series of real-estate seminars is scheduled to begin on Nov. 28, but Trump lawyer Daniel Petrocelli said the president-elect needs to “devote all of his time and attention to the transition process.”

Trump is due to assume office on Jan. 20, 2017.

“The 69 days until inauguration are critical and all-consuming,” Petrocelli said in the filing, arguing that the president-elect should not be required to stand trial during that time.

Petrocelli had said at a hearing in San Diego on Thursday that he would request the delay, though U.S. District Judge Gonzalo Curiel, who is overseeing the lawsuit, told lawyers he was not inclined to put off the six-year-old case further and encouraged the parties to settle.

The lawsuit involves students who claim they were lured by false promises to pay up to $35,000 to learn Trump’s real estate investing “secrets” from his “hand-picked” instructors.

Trump owned 92 percent of Trump University and had control over all major decisions, the students’ court papers say. The president-elect denies the allegations and has argued that he relied on others to manage the business.

Curiel also tentatively rejected last week a bid by the president-elect to keep a wide range of statements from the presidential campaign, which included attacks against Curiel himself, out of the fraud trial.

Trump attacked the judge as biased against him. He claimed Curiel, who was born in Indiana but is of Mexican descent, could not be impartial because of Trump’s election campaign pledge to build a wall between the United States and Mexico.

Trump’s lawyers have argued that Curiel should bar from the trial accusations about Trump’s personal conduct including alleged sexual misconduct, his taxes and corporate bankruptcies, along with speeches and tweets.

Curiel is presiding over two cases against Trump and the university. A separate lawsuit by New York’s attorney general is pending.

While presidents enjoy immunity from lawsuits arising from their official duties, the U.S. Supreme Court has held that this shield does not extend to acts alleged to have taken place prior to taking office.

(Reporting by Tracy Rucinski; Editing by Alan Crosby

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Zuckerberg again rejects claims of Facebook impact on U.S. election


Facebook CEO Mark Zuckerberg is seen on stage during a town hall at Facebook's headquarters in Menlo Park, California September 27, 2015. REUTERS/Stephen Lam/File Photo

Facebook CEO Mark Zuckerberg is seen on stage during a town hall at Facebook’s headquarters in Menlo Park, California September 27, 2015.REUTERS/Stephen Lam/File Photo

Zuckerberg again rejects claims of Facebook impact on U.S. election

By Chris Prentice | NEW YORK

Facebook Inc chief executive Mark Zuckerberg again rejected the idea that the social network affected the U.S. presidential election, saying late Saturday it is “extremely unlikely” news hoaxes changed the outcome.

Ensnared in a string of content controversies in recent months, Facebook has insisted that it is a technology company, not a media firm. But scrutiny of the site has heightened since the surprise election of Republican Donald Trump on Tuesday, with critics alleging the site helped spread lies via fake news stories and hoaxes.

Zuckerberg has vehemently defended the network against such criticism, calling the idea that Facebook affected the election “crazy” at a conference on Thursday. He echoed that stance in his late Saturday post, though he said the company would do more to prevent fake news.

Such hoaxes represent a sliver of content shared on Facebook and because they are not limited to partisan views or politics, it is unlikely they could have changed the election’s outcome, Zuckerberg said.

“Of all the content on Facebook, more than 99 percent of what people see is authentic,” he said, noting the network’s goal is to “give every person a voice.”

Still, Facebook has launched work to enable people to flag hoaxes and fake news, the statement said.

Facebook has faced a number of content controversies this year, including international outcry after it removed an iconic Vietnam War photo due to nudity, a decision that was later reversed. The thorniest content issues are decided by a group of top executives at Facebook.

Questions over content policing have returned to the fore in the tense days since the election, which has led to protests against Trump and his proposed policies in major U.S. cities.

Ahead of the Nov. 8 election, Facebook users saw fake news reports erroneously alleging that Pope Francis endorsed Donald Trump and that a federal agent who had been investigating Democratic candidate Hillary Clinton was found dead.

Senior management have launched a conversation to examine Facebook’s involvement in affecting opinions and votes, The New York Times reported on Saturday, saying a group of vice presidents and executives began discussing late Tuesday the company’s role in the election’s outcome.

Facebook’s policy team was called together and the firm plans to address staff concerns at a broader meeting, the paper reported, citing anonymous sources.

Facebook representatives were not immediately available to comment on the report.

“After the election, many people are asking whether fake news contributed to the result, and what our responsibility is to prevent fake news from spreading,” Zuckerberg said on Saturday.

“These are very important questions and I care deeply about getting them right.”

(Reporting by Chris Prentice; Editing by Mary Milliken)

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After U.S. election, retirement security heads for a crash

By tpsdave from Pixabay

After U.S. election, retirement security heads for a crash

By Mark Miller

Retirement security already looked like a looming train wreck for most U.S. households before Election Day. Now, the consolidation of Republican control of government threatens to accelerate the crash.

It is too early to predict the agenda Donald Trump will bring to the White House on retirement policy, or where it might fit on his priority list. We live in a rapidly aging nation, but retirement policy never received a serious airing during the hot mess of a campaign that just ended.

It is also impossible to predict how Trump’s priorities will match up with those of Republican leaders in Congress, considering their deep divides on many issues during the campaign.

But previous Republican proposals and Trump’s campaign pledges point toward a range of possible GOP retirement initiatives between now and the 2018 midterm elections.

The economic frustrations of older, middle-class voters played an important role in Trump’s upset win over Hillary Clinton. Exit polling reveals that voters above age 45 favored him, especially among middle-class households.

These are households bearing the brunt of job loss, income inequality, the decline of traditional defined benefit pensions, rising healthcare costs and shrinking Social Security benefits. And they have managed to save precious little for retirement: 62 percent of working households headed by people aged 55-64 have less than one year of annual income, according to the National Institute on Retirement Security (NIRS) – far less than they will need to maintain their standard of living in retirement.

But here is the irony: Republican control of the White House and Congress over the next two years could leave these struggling near-retirement households even worse off. Below is just a partial rundown of the retirement-related issues that will bear careful watching.


This might not seem like a retirement issue at first glance. But if Trump and Republican lawmakers make good on their promises to repeal the Affordable Care Act, millions of older Americans who fall short of Medicare’s eligibility age (65) likely will lose their health insurance.

Hate Obamacare if you like, but it has hugely benefited millions of older low- and middle-income households. The Commonwealth Fund estimates that the percentage of uninsured Americans aged 50-64 fell to 9.1 percent this year, compared with 14 percent in 2013. That translates to 3.1 million previously uninsured people who now have health insurance.


Republicans will likely try to repeal the law, or at minimum gut many of its most important provisions, such as Medicaid coverage for low-income people, and premium subsidies for middle-income households.

The uninsured-and-over-fifty group will be more likely to forego healthcare, and they will arrive at Medicare’s doorstep with more untreated illnesses.

“If they repeal it and don’t replace it with something meaningful, it’s going to really hurt this older population,” said Christian Weller, professor of public policy at the University of Massachusetts Boston.


The U.S. Department of Labor finalized rules this year requiring all financial advisers working with retirement accounts to avoid conflicts and act in the best interest of clients in the products they recommend. This is a huge, positive step in reforming the way retirement savings are managed.

Trump took no position on the so-called fiduciary rule, but he has pledged to cut government regulation aggressively. And one of his advisers promised during the campaign to repeal the rule, even likening it to slavery.

Financial-services lobbyists have been trying to spike the Labor Department rule in the courts and through legislation; President Barack Obama vetoed Republican-sponsored legislation aimed at blocking it in June.

“There is potential for a partial or full pullback,” said Rick Jones, senior partner and national retirement practice leader at Aon Hewitt.


Trump said during the campaign he does not favor cutting Social Security or Medicare benefits. But Republican congressional leadership has long favored raising the Social Security retirement age, reducing cost-of-living adjustments and at least partial privatization of the program by allowing workers to divert part of their payroll tax contribution to a personal savings account.

This year’s Republican convention platform stated that Social Security’s solvency problems should be addressed without tax increases. That is a de facto call for benefit cuts, because there are only two ways to solve Social Security’s financial problems: cut benefits or increase revenue. The platform also contained a vague call for privatization.

On Medicare, House Speaker Paul Ryan has advanced plans repeatedly to shift Medicare toward so-called premium support. Seniors could choose between private insurance plans and traditional Medicare, and receive a voucher from the federal government to purchase coverage. Studies have shown this approach would shift costs to seniors.


Among the other questions to ponder: How will we reform our retirement saving system to increase coverage and low-cost saving? How will we fix our broken approach to financing long-term care?

All told, the inequalities in our retirement security system could grow worse over the next four years – much worse. That would be not just an ironic outcome of this election – it would be tragic.

(The opinions expressed here are those of the author, a columnist for Reuters)

(Editing by Matthew Lewis)

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Trump may already have a plan ready to revamp Dodd-Frank

PhotoU.S. President-elect Donald Trump (2ndR) answers questions as his wife Melania Trump and Senate Majority Leader Mitch McConnell (R-KY) watch on Capitol Hill in Washington, U.S., November 10, 2016. REUTERS/Joshua Roberts

U.S. President-elect Donald Trump (2ndR) answers questions as his wife Melania Trump and Senate Majority Leader Mitch McConnell (R-KY) watch on Capitol Hill in Washington, U.S., November 10, 2016.REUTERS/Joshua Roberts

Trump may already have a plan ready to revamp Dodd-Frank

By Lisa Lambert and Sarah N. Lynch | WASHINGTON

When Jeb Hensarling, the Republican chair of the U.S. House Financial Services Committee, released legislation this summer to weaken the major financial law known as Dodd-Frank, many said it was a prêt-a-porter plan that his party’s nominee, Donald Trump, could easily adopt.

Now that Trump is president-elect, he appears to be doing just that.

Language about financial services posted on the Trump transition website,, echoes the tone of Hensarling’s bill, known as the CHOICE Act.

It calls Dodd-Frank, passed in the wake of the 2007-09 financial crisis and recession, as “a sprawling and complex piece of legislation that has unleashed hundreds of new rules and several new bureaucratic agencies” and promises to dismantle and replace it with “new policies to encourage economic growth and job creation.”

Hensarling’s legislation, which his committee approved in September, also takes a replacement approach.

The Texas Republican had unveiled his proposal in Trump’s hometown of New York in June, and then met with the businessman later in the day. At the same time, Hensarling was mentioned as a possible Treasury secretary by Trump’s team. He has said he is not pursuing a Cabinet position.

“The CHOICE Act accurately reflects the priorities that President Trump has placed on the Dodd-Frank problem,” said J.W. Verret, an associate professor at the George Mason University Antonin Scalia Law School and financial regulation expert. Verret regularly meets with and briefs members of Congress and the Securities and Exchange Commission on financial regulation.

I think it is a great blueprint for everything that he has promised,” said Verret, a former Republican congressional staffer.

The Hensarling blueprint would primarily allow banks to choose between complying with Dodd-Frank or meeting tougher capital requirements – primarily to maintain a ratio of tangible equity to leverage exposure of 10 percent.

It would also reorganize the Consumer Financial Protection Bureau, throw out the Volcker Rule restricting banks from making speculative investments and eliminate the authority of the Financial Stability Oversight Council to designate non-banks as “systemically important.”

It also differs from the Dodd-Frank legislation in the way it treats insolvent banks. Hensarling says his approach will prevent taxpayer dollars from being used to bail out failed institutions.

Alongside Obamacare, Dodd-Frank is considered one of Democratic President Barack Obama’s signature domestic policies.

The most senior Democrat on the Senate Banking Committee, Sherrod Brown, has been a vocal defender of it, as has liberal firebrand Senator Elizabeth Warren. That means a Dodd-Frank revamp could stall in one chamber of Congress. Senate rules allow a single member to block a bill from proceeding to a vote.

Trump said last May that he would dismantle Dodd-Frank, primarily because the law makes it hard for banks to loan money.

But few have called for total demolition of it, with bank industry sources privately saying they would like to see an easing of Dodd-Frank rules.

Trump campaign adviser Anthony Scaramucci, a Wall Street financier, said this week that the administration will review the law and “the worst anti-business parts of it will be gutted.”

Verret said he believes some components of the CHOICE Act will appeal to the populist anger felt by Tea Party members and Trump supporters toward big banks.

One such provision, he said, would place limits on how central banks can lend to financial institutions in times of crisis, an in effort to prevent future bailouts.

This kind of reform, he added, appeals “to both populists and free market thinkers at the same time.”

(Reporting by Lisa Lambert and Sarah N. Lynch; editing by Linda Stern and Jonathan Oatis)

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WRAPUP 3-Trump packs transition team with loyalists and family

Byquinntheislander from Pixabay

WRAPUP 3-Trump packs transition team with loyalists and family

By Steve Holland and Luciana Lopez

President-elect Donald Trump began laying the groundwork on Friday to take office on Jan. 20, 2017, gathering the most loyal advisers from his insurgent campaign and three of his children to plot his transition strategy.

Trump put Vice President-elect Mike Pence in charge of his White House transition team, while demoting his former transition chief, tarnished New Jersey Governor Chris Christie, to one of the six vice-chair posts.

Daughter Ivanka and sons Eric and Donald Jr. and son-in-law Jared Kushner accounted for a fourth of the 16-member executive committee, which was filled with politicians and advisers who stuck with Trump during his rollercoaster first run for public office.

Aides huddled in the real-estate mogul’s Trump Tower in New York City to begin prioritizing policy changes and considering Cabinet picks and other candidates for the 4,000 positions he will need to fill shortly after he takes the reins of the White House.

A member of the Trump transition team told Reuters there were more than 100 people now involved in developing “white papers” on what regulations to roll back after Jan. 20. Some environmental measures and a rule requiring retirement advisers to act in their clients’ interests could be among the first on the chopping block, an industry lobbying source said.

Trump promised during his campaign to cut taxes, clamp down on immigration and repeal President Barack Obama’s signature Affordable Care Act, popularly known as Obamacare.

But in interviews with the Wall Street Journal and CBS “60 Minutes” on Friday, he said he was open to keeping some provisions of Obamacare.

James Woolsey, a former CIA director who has advised Trump on foreign policy, said several of Trump’s campaign promises were “advocacy of a general direction” that may require compromise – including his signature pledge to build a wall on the border with Mexico.

Woolsey told CNN that border security could be achieved with a combination of fence and wall. “I don’t think we ought to fall on our sword about the difference between a wall and fence. Maybe this will be cheaper because it’s mainly fence, but it’s a good fence. I wouldn’t have any problem with that myself,” he said.

Trump, a billionaire real estate magnate, also moved on Friday to extricate himself from his sprawling business empire, which will be overseen by his three grown children on the transition team.

His company said it was vetting new business structures for the transfer of control to the three and the arrangement would not violate conflict-of-interest laws. But government ethics experts said the move would fall short of blind trust standards and was unlikely to prevent potential conflicts of interest.

Trump said that Pence – who has strong ties to Republican leaders in Congress – will build on work done by Christie and has the mission of assembling “the most highly qualified group of successful leaders who will be able to implement our change agenda in Washington.”

Christie, once viewed as a top candidate for attorney general, is dealing with political fallout from the ‘Bridgegate’ lane closure scandal. Former New York mayor Rudy Giuliani is now the leading contender for the top law enforcement job, according to two sources familiar with the discussions.


Trump’s campaign spent relatively little time on transition planning during the campaign, and even his Republican supporters had been bracing for a loss to Democratic rival Hillary Clinton in Tuesday’s election.

“I was on Romney’s transition team, and it was a well-oiled machine months before the election. Now there’s a scramble,” said one Republican source, referring to the party’s 2012 presidential nominee, Mitt Romney.

Since Tuesday, dozens of possible cabinet appointees have been floated, from grassroots conservative heroes like Sarah Palin to seasoned Washington hands like David Malpass.

During his campaign, many establishment Republicans condemned Trump’s racially inflammatory rhetoric as well as his attacks on trade deals and the NATO alliance, which could take many traditional names out of the running.

But outgoing Republican Senator Kelly Ayotte – who had distanced herself from Trump at points in her unsuccessful reelection campaign in New Hampshire – was being floated as a potential defense secretary on Friday, the Washington Post reported.

Trump’s relatively small cadre of steadfast supporters is expected to play a prominent role in his administration. Campaign sources say Alabama Senator Jeff Sessions could serve as Defense Secretary, former House Speaker Newt Gingrich might be named as Secretary of State and retired General Michael Flynn could serve as national security adviser.

Those three, along with Giuliani and retired neurosurgeon Ben Carson, were named as vice chairs of the transition team.

Republican National Committee chairman Reince Priebus is a strong candidate for White House chief of staff, according to sources close to the campaign. Trump campaign CEO Steve Bannon, a conservative provocateur, is also being considered for the job.

As Trump mulled his team, demonstrators hit the streets in major cities for the third straight night to denounce his election and the inflammatory campaign rhetoric on immigrants, Muslims and women. Thousands marched through Miami, Atlanta, Philadelphia, New York and San Francisco as night fell.


Trump appears to be leaning toward seasoned Republicans for many economic positions. David Malpass, a former Treasury and State Department official, and Paul Atkins, a former Securities and Exchange Commission official, are guiding the transition team on economic issues.

“This is one area where the most Republican orthodoxy will come out,” said Brandon Barford, a former Republican congressional staffer.

The Trump transition website,, picked up on the tone of legislation aimed at weakening Dodd-Frank financial regulations that was released this summer by Republican chair of the House Financial Services Committee, Jeb Hensarling.

Trump’s victory is forcing President Barack Obama to scale back his ambitions for his final months in office. Obama, who is set to meet with key allies from Europe and Asia next week during his final foreign trip, is giving up on a last-ditch attempt to seek congressional approval for the Trans-Pacific Partnership trade deal before leaving office.

Japanese Prime Minister Shinzo Abe, a TPP partner, is slated to meet with Trump next week in New York, and the president-elect also fielded calls from German Chancellor Angela Merkel and French President Francois Hollande on Friday.

But EU Commission President Jean-Claude Juncker had a blunter reaction to the Trump transition. “I think we will waste two years before Mr. Trump tours the world he does not know,” Juncker said on Friday.

(Additional reporting by David Shepardson, Emily Stephenson, Ginger Gibson, Eric Beech, Diane Bartz, Jason Lange, David Brunnstrom, David Lawder, Julia Harte and Julia Edwards Ainsley in Washington, Dan Whitcomb in Los Angeles; Writing by Roberta Rampton and Andy Sullivan; Editing by Bill Rigby and Mary Milliken)


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Trump bets blast Dow to new high, bank sector hits 2008 levels




 by publicdomainpictures at pixabay

graph-163509_1280Trump bets blast Dow to new high, bank sector hits 2008 levels

By Noel Randewich

U.S. banking sector shares on Thursday surged to levels not seen since the midst of the 2008 financial crisis, pushing the Dow to an all-time high, while technology shares sank as Wall Street rearranged its bets to benefit from Donald Trump’s presidency.

The S&P 500 financial sector .SPSY surged 3.70 percent to its highest since the 2008 financial crisis, bringing its gain since Trump’s surprise victory in Tuesday’s election to 7.9 percent, its biggest two-day gain since 2011.

Shares of Wells Fargo & Co (WFC.N) jumped 7.58 percent to their highest since January, and have now erased all of the losses incurred in the wake of a scandal over fake accounts opened by its employees. Bank of America (BAC.N) surged 4.40 percent and JPMorgan Chase (JPM.N) rallied 4.64 percent to a record high.

Trump has sided with leading conservatives in calling for the repeal of the 2010 Dodd-Frank Financial Reform Act largely opposed by banks.

“The Trump campaign did say it would repeal Dodd-Frank. Rates are higher and the yield curve is steeper. Those are all good things for the banks,” said Warren West, principal at Greentree Brokerage Services in Philadelphia.

Apple (AAPL.O) dropped 2.79 percent while (AMZN.O) fell 3.82 percent and the S&P 500 technology index .SPLRCT fell 1.59 percent.

The Dow Jones industrial average .DJI jumped 1.17 percent to end at 18,807.88, smashing through its previous record high set in August by almost 1 percent.

The S&P 500 .SPX rose 0.2 percent to 2,167.48 while the Nasdaq Composite .IXIC dropped 0.81 percent to 5,208.80, hurt by losses in tech shares.

With Thursday’s gain, the Dow is up 8 percent in 2016 and the S&P 500 is up 6 percent.

High-dividend sectors utilities .SPLRCU, telecom services .SPLRCL and consumer staples .SPLRCS sold off by more than 2 percent as bond yields rose due to expectations of higher interest rates.

The market got a lift after St. Louis Federal Reserve President James Bullard said the Republican sweep of the White House and Congress could break the current gridlock over national policy in a potential boon to the U.S. economy.

Industrials .SPLRCI trailed the financials with a 2.05 percent advance.

Macy’s (M.N) rose 5.6 percent after the department store operator raised its full-year sales forecast and announced a partnership to monetize some of its real-estate assets.

After the bell, Nordstrom (JWN.N) reported quarterly results that sent its shares 5 percent higher while Walt Disney’s (DIS.N) quarterly report pushed its stock down 2.6 percent.

Declining issues outnumbered advancing ones on the NYSE by a 1.15-to-1 ratio; on Nasdaq, a 1.58-to-1 ratio favored advancers.

The S&P 500 posted 84 new 52-week highs and seven new lows; the Nasdaq Composite recorded 336 new highs and 48 new lows.

About 12.3 billion shares changed hands on U.S. exchanges, far above the 7.3 billion daily average over the last 20 sessions.

(Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by James Dalgleish)

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The Future is still Bright!


by Geralt at pixabay

The Future is still Bright!

by Bill McBride on 11/09/2016 02:53:00 PM

 In January 2013 I wrote The Future’s so Bright …. In that post I outlined why I was becoming more optimistic. I updated that post earlier this year (with a discussion of demographics).

For new readers: I was very bearish on the economy when I started this blog in 2005 – back then I wrote mostly about housing (see: LA Times article and more here for comments about the blog). I predicted a recession in 2007, and then I started looking for the sun in early 2009, and I’ve been fairly positive since then (although I expected a sluggish recovery).

I’ve also been optimistic about next year (2017), with most economic indicators improving – more jobs, lower unemployment rate, rising wages and much more – and with more room to run for the current expansion.   Also the demographics in the U.S. are becoming more favorable (see here for more on improving demographics).

Now Mr. Trump has been elected President.  How does that change the outlook?

In the long term, there is little or no change to the outlook.  The future is still bright!  Although I’m concerned about the impact of global warming.

In the short term, there is also no change (Mr Obama will be President until January, and it takes time for new policies to be implemented).

The intermediate term might be impacted. The general rule is don’t invest based on your political views, however it is also important to look at the impact of specific policies.

I will probably disagree with most of Mr. Trump’s proposals for both normative reasons (different values), and for positive reasons (because Mr. Trump rejects data that doesn’t fit his view – and that is not good).

With Mr. Trump, no one knows what he will actually do.  He has said he’d “build a wall” along the border with Mexico, renegotiate all trade deals, cut taxes on high income earners, repeal Obamacare and more.   As an example, repealing the ACA – without a replacement – would lead to many millions of Americans without health insurance.  And those with preexisting conditions would be uninsurable.   This seems politically unlikely (without a replacement policy), but it is possible.

Since Trump is at war with the data (he rejects data that doesn’t fit his views), I don’t expect evidence based policy proposals – and that almost always means bad results.   However bad results might mean higher deficits with little return – not an economic downturn.  Until we see the actual policy proposals, it is hard to predict the impact.  I will not predict a recession just because Trump is elected.  In fact, additional infrastructure spending might give the economy a little boost over the next year or two.   On the other hand, deporting 10+ million people would probably lead to a recession.  We just have to wait and see what is enacted.

In conclusion: The future is still bright,  but there might be a storm passing through.



by Bill McBride on 11/09/2016 02:53:00 PM

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Wall Street jumps after Trump wins White House


U.S. President elect Donald Trump arrives to address supporters with his son Barron and wife Melania at election night rally in Manhattan, New York, U.S., November 9, 2016.REUTERS/Brendan McDermid

U.S. stocks rose sharply on Wednesday in a dramatic turnaround from deep overnight losses as Wall Street digested the upset presidential election victory of Republican Donald Trump.

The Dow Jones industrial average .DJI rose 255.27 points, or 1.39 percent, to 18,588.01, the S&P 500 .SPX gained 23.52 points, or 1.1 percent, to 2,163.08 and the Nasdaq Composite .IXIC added 57.58 points, or 1.11 percent, to 5,251.07.

(Reporting by Noel Randewich; Editing by James Dalgleish)

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U.S. mutual fund managers brace for closer presidential election


People sit outside the New York Stock Exchange (NYSE) during the morning commute in New York City, U.S., September 15, 2016.REUTERS/Brendan McDermid
By David Randall | NEW YORK

The U.S. presidential election is looking like less of a certainty for Democratic nominee Hillary Clinton than it did a month ago, prompting mutual fund managers to brace for more volatility by raising cash and getting their buying lists ready for opportunities.

“The market has been pricing in a Hillary victory, and now with the introduction of the Comey letter, there’s a stronger possibility that the base case doesn’t happen,” said Phil Orlando, portfolio manager of the New York-based Federated Global Allocation (FSTBX.O) fund.

FBI Director James Comey wrote Congress last Friday that more of Clinton’s emails would be scrutinized as part of an investigation into Clinton’s use of a private email system while she was secretary of state.

The benchmark S&P 500 stock index has shed nearly 2 percent since Comey’s letter was made public, and notched its longest losing streak in nearly five years.

Orlando said his fund has been raising cash out of the possibility that the market could fall as much as 10 percent from the all-time high of 2,193.81 it notched Aug. 15.

And Orlando is not the only one. Lipper data released on Thursday showed investors fled U.S. based stock and bond funds in the latest week. Nearly $7.7 billion left taxable bond funds in the seven days through Nov. 2, the largest weekly withdrawals this year by a wide margin, while U.S. equity funds showed $3.4 billion in outflows.

His fund is now neutral to the market, he said, in order to guard against the possibility that either Republican nominee Donald J. Trump wins the election, or that Democrats win both the Senate and the House in addition to the presidency, both of which outcomes would push the market down at least another 5 percent, he said.

The market volatility has also caused anxiety for retail investors, according to Phil Blancato, chief executive of Ladenberg Thalmann Asset Management in New York, who has cautioned against overreacting to the market movements caused by the election.

“I’ve had multiple people call us up to say ‘let’s raise cash in my account’ because of the election,” said Blancato.

“Having to talk them off a cliff is becoming almost comical at this point because of the idea that suddenly the world is going to fall into the ocean because Trump wins the election.”

Terri Spath, chief investment officer at Sierra Investment Management in Santa Monica, California, has been selling as the market’s volatility picks up, shifting more assets into emerging market debt and floating rate loans that should be more “insulated” from the results of the U.S. election, she said.

“We think it’s going to be a tight race and we’re willing to step out of the way if volatility picks up,” she said.

One area in which she has been buying, however, is infrastructure and transportation related stocks that have dropped more than the broad market, she said.

Both candidates have pledged to spend more on rebuilding bridges, tunnels and other links, while the iShares Global Infrastructure ETF IGF.O, one of the best proxies for global infrastructure stocks, is down 4.3 percent over the last month.

Eric Marshall, a fund manager at Dallas-based Hodges Capital, said he welcomed the sell-off because the U.S. market had been steadily rising since February except for a short fall after the so-called Brexit vote.

He is drawing down his approximately 8 percent stake in cash to buy more healthcare and consumer companies that have fallen over the last week, he said, and is preparing to buy more should either Trump wins or the Democratic party sweeps the election.

“The Brexit blip was the last time when you could have made some money, and we’re ready to be opportunistic again,” he said.

(Additional reporting by Chuck Mikolajczak; Editing by Bernadette Baum)

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Published at Sat, 05 Nov 2016 01:28:33 +0000

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