Nick Ferres, chief investment officer at macro fund manager Vantage Asset Management, nailed the market’s immediate reaction to the return of Donald Trump as US president: “Make volatility great again!”
The usual stock market suspects surged as well: Tesla and JP Morgan had double digit moves higher. The prize gains, however, were made by GEO Group which made an impressive 22% move higher on the news. You may wonder who this is: it operates prisons across the US. Trumps new anti-immigration law may mean good business.
Honestly, only in America!
The list of stocks that hit record highs reads like a who’s who of the US market: Nvidia, Amazon, Netflix, Palantir, News Corp, Walmart, JPMorgan, Goldman Sachs, Morgan Stanley, Wells Fargo, BlackRock, Apollo and Blackstone.
So, I ‘guess’ this means Trump’s win is good for the equities markets?
Then we have a slew of promised tax cuts, and let’s face it, what self-respecting real estate mogul doesn’t? Trump’s plan for massive personal and corporate tax cuts is expected to boost growth and inflation, keeping interest rates high and strengthening the US dollar, while also further blowing out the federal budget.
I ‘guess’ Trump is good for the wallets of normal working-class Americans and business.
And higher inflation and possibly higher interest rates (or just less interest rate cuts than the market is letting on).
Crypto owners have also rejoiced over the news of Trump’s victory. Not only is the new president actively pushing his own son’s crypto project, World Liberty Financial, but he has also vowed to make the US the “crypto capital of the world”.
Bitcoin, the world’s biggest cryptocurrency, is also expected to benefit from deregulation, tax incentives and economic policies that favour digital assets.
I suppose that means Trump will be bullish for cryptos from now on.
He has very little time for regulations too. We will face four years of softer and easing deregulation instead. His desire to “drill, baby, drill” in the energy sector certainly sounds bullish. More so the banks, who may now get their wish and remove a need for them to hold so much capital on their books.
Does that mean “great” news for banks and energy?
But then there’s the not-so-good policies to consider. His illegal immigration tones hit hard, and harsher sentences and massive deportation awaits many who entered the US illegally (or not!). The likely raising of tariffs on more imported Chinese goods is certain to raise alarm in Beijing and no doubt raise the rhetoric too.
He has even threatened to place 10-20% tariffs on selected Australian goods into the US too.
Finally, the alter upon which all this will fall will be the US budget deficit, which most Republican presidents to be fair seem not to care too much about.
So, a right royal mixed bag really. But honestly, here is what you need to be asking.
Will Trump really make a difference?
Here is Trump’s “true” role in all this.
The answer of course is – no! Trump isn’t going to change anything.
That is, anything to do with the 18.6-year Real Estate Cycle turning on time. The cycle must finish on time. Therefore, the cycle will finish on time.
Despite everything I’ve laid out to you above that, let’s face it, Trump should be able to enact and deliver.
Does that sound contrived? Maybe arrogant? On the surface, I can appreciate the sentiment. However, I have history on my side here.
Trump will have zero bearing on the cycle peak then bust to come because, frankly, he will not see it coming. Unlike when Trump first entered office in 2017, he will inherit a Congress full of members in his image who endorse his style and politics.
His mantra of “A golden age for America” will ring aloud through the halls of power. Control of the presidency and the legislature will give Trump power to implement his policy platform. It would also give him the power to replace up to three Supreme Court justices who are expected to retire during the next four years.
In other words, Supreme Court judges anointed by Trump himself, and expected to serve his best interests. He also demanded a ‘my way or the highway’ level of loyalty from White House staff and government officials when he was last president. In fact, he lays much of the blame on losing re-election on those same people.
This time, only the most loyal may serve in any capacity in his staff.
He will simply never be told as the risks surrounding the economy gets bigger as we approach the real estate cycle peak (if indeed anyone close to him is paying any attention whatsoever). Which means any action taken will be too late, overwhelmed by the sheer scale of the problems building.
Besides, as our valued PSE members already know, our research of the cycle has stated explicitly that during the final few years of the current cycle, interest rates and inflation will be high. Speculation will run rampant; credit will become ever easier to obtain.
Driven by the ‘hidden order’ of the economy, impervious to all but its own natural timing.
Trump’s policies are symptoms, not the cause, of all of these drivers.
And he will push those symptoms higher than ever most likely. I mean, have a look at his victory party in Mar-a-Lago, at his palatial Florida residence. Speaking about the assistance he had from Elon Musk, Trump said, “We have a new star…he’s an amazing guy. We must protect our geniuses. We don’t have that many of them.”
Takes one to know one I suppose!
Along with Musk, Trump spoke in front of Australian mining billionaire Gina Rinehart, who was a guest among the Mar-a-Lago partygoers, along with billionaire fund manager John Paulson and property mogul Steve Wynn.
C’mon! Are you serious? Rarely have you seen a gathering of the biggest rent-chasers on earth in the one room. Geez, wonder what they could possibly want from the new president?
Here’s what matters for you. You must ignore and block out the noise, hubris, and hype and, eventually, calamity that will underpin the next four years of Trump’s presidency. Trust me, it’s going to be wall-to-wall stuff.
Ask yourself; am I ready? Do I know what I must do, and when, to both profit and protect my financial future during these last remaining years of the cycle.
If you have any doubts about this, I have your solution; membership to the Boom Bust Bulletin (BBB).
Learn the history of the real estate cycle, its unique timing and how it can help you to both profit and protect your valuable investment capital and financial future. Each month you’ll receive all the latest news and trends that pertain to the cycle as it turns towards its inevitable peak then bust.
All for just $4USD a month! Incredible value.
Strap yourself in, you arguably won’t experience a time quite like what we are about to live through again. Well, until this time next cycle!
Sign up now.
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