The Economic Outlook

[geordief]

This seems to have need of revision since the results of the American Presidential Election.

 

Does anyone have a dispassionate view on the matter?

 

Is there going to be a big shock one way or another or will the international economies and trade tend to carry on regardless ?

 

EDIT: no Economics sub-forum as such?

Edited November 24, 2016 by geordief

[iNow]

The market was tending bear during the US election. Lots of uncertainty about what comes next made it difficult to plan and invest.

 

When the election ended, markets surged. This would have happened regardless of who won. The surge seems a bit higher right now because it appears Trump will deregulate, sacrificing the environment and citizen health for focus on short-term profit. Not smart in the long run, but markets like it.

 

More broadly, there are bubbles all around, but that's not terribly uncommon or unusual, TBH.

 

The one that gives me the most pause is how China has been juicing their economy injecting cash for a long while like a body builder on steroids. Tens of millions of people have been raised out of poverty, their middle class has ballooned, and their primary sectors have moved from agriculture to manufacturing. These are all good things, but sustaining for much longer will be tough and a crash is likely in the next few years.

 

India will be interesting to watch, too, as they try to bring their people out of poverty, install working toilets, and take advantage of the need for high-tech, coding, and remote services. They're also geographically in an interesting place so can have lots of trading partners. Their rise will end a significant amount of human suffering and poverty, but is likely to reduce emplacement and well being elsewhere for those that have previously monopolized this space.

 

There's also the rise of nationalism and xenophobia, so we're likely to see trade barriers imposed and that will hurt everyone, the consumers and the producers. Brexit was an early indicator of this. People are mad and cutting off noses to spite their face.

 

Historically, there are always ups and downs, sometimes very significant painful ones, but the trend has consistently upward. I'd like to see us take smart steps to magnify that upward trend, things like massive investment in clean energy, infrastructure repair, and childhood education since all of these have massive returns (and should be viewed as investments instead of costs, especially in context of the low interest rates at which we can borrow right now), but I'm doubtful those in power and those who elected them recognize the value of this approach. I'm not optimistic, not today anyway.

 

Regardless... If anyone tells you they know what's coming next with the economy, they're either wearing a tinfoil hat or trying to sell you something. The above are just some random thoughts based on the stuff I read, but I want to be clear that my tea leaves are no more accurate than anyone else nor my crystal ball any less cloudy.

[Sensei]

Does anyone have a dispassionate view on the matter?

Dispassionate view on the matter can only have 1) ignorant 2) billionaire 3) somebody who doesn't bother about money..

 

Is there going to be a big shock one way or another or will the international economies and trade tend to carry on regardless ?

Giving up TPP/NAFTA by USA, as promised by DT, will obviously hit economy of countries from Asia, Mexico (increasing immigration!), Canada which could spread as wave of increased unemployed people, frustrated, without money to pay bills, and what might be worser to be unable to pay credits, which can lead to bankruptcy or serious problems of Asians financial sector..

(so if you are trading stocks short-sale Asians banks stocks)

 

But what is IMHO worldwide worser is ignorance of DT about temperature increase of the Earth, saying complete nonsense that it's made up conspiracy etc, and his willingness to destroy all the effort made to heal the Earth...

 

Did not I say already the all politicians should pass through IQ test exam?

Now I will say, that the all politicians should have PhD in quantum physics to become even member of parliament, minister, prime minister, president..

Once they have PhD quantum physics done, can go other science or humanistic university, then to politics, when they are ready..

Idiots, cretins, should go to school, instead of being elected even to the smallest chair, with the smallest power to do something..

With their incompetence they can make huge disaster to plentiful of people.

Edited November 24, 2016 by Sensei

[Ten oz]

Regardless... If anyone tells you they know what's coming next with the economy, they're either wearing a tinfoil hat or trying to sell you something. The above are just some random thoughts based on the stuff I read, but I want to be clear that my tea leaves are no more accurate than anyone else nor my crystal ball any less cloudy.

It is unknown what Trump will or will not do. Nothing he says can be taken at face value. He claims to be against TPP but we don't really know until it happens what will happen. Trump may leave the ACA untouched, no ones really knows.

 

The two initial things I am looking at economically are interest rates and energy. Rates will be going up which probably will have a negative impact on new home buyer. However anything is possible with Trump so deregulation in banking could allow mortgage companies to create clever and risky ways to get people signed up and create another housing market crisis. I am looking at energy because Trump and most Republican's in general have a yesterday is tomorrow mindset towards it. They see oil and coal as the truth the way and the life. However the oil market is already flooded with product and wind/solar has actually increase at levels in recent years that we simple aren't hurting for more energy. Exporting coal is what I assume the (GOP) have in mind.

 

Long term things are Social Security and Medicare. It is no secret that the GOP has wanted to reform and at least partiially privatize both. It isn't something I think they do day one because of how unpopular it would be. However I suspect we will see a plan rolled out eventually. Looking through my "crystal ball" partially privatizing Social Security and allowing some portion of it put into the market (as Bush proposed) would send markets soaring but also create nurmerous bubbles that in time would lead to a collaspe which would cost millions their Social Security and lead to some form of gov't bailout andlength economic recession/depression.

 

Thing is we just don't have a clue. Bush coasted along pushing tax cuts and not much else until 9/11 and then we ended up with 2 wars, new gov't departments, a militarization of our law enforcment agencies, an airline bail out, and etc. Every president faces un unaccpted events. Reagan had Beriut, Bush 41 the invasion of Kuwait, Clinton the USS Cole Bombing, Bush 9/11, and Obama Benghazi. It is unclear how Trump will manage basic policy. I don't think anyone has any idea how Trump will respond to emergent situations. The what ifs are endless: what if North Korea attacks/threatens South Korea or Japan, China takes control of Taiwan, Iran attacks Israel, Russia pushes into the rest of Ukraine, ISIS moves into Turkey, Mexico won't pay for the wall (hahaha), or etc.

Dispassionate view on the matter can only have 1) ignorant 2) billionaire 3) somebody who doesn't bother about money..

 

Giving up TPP/NAFTA by USA, as promised by DT, will obviously hit economy of countries from Asia, Mexico (increasing immigration!), Canada which could spread as wave of increased unemployed people, frustrated, without money to pay bills, and what might be worser to be unable to pay credits, which can lead to bankruptcy or serious problems of Asians financial sector..

Nothing Trump says can be taken at face value. We don't know what Trump will do with regards to TPP or NAFTA. No one knows. I honest don't think Trump knows at the moment.