No stimulus
The (alleged) infrastructure spending that Trump had been talking about throughout his campaign isn’t going to happen.
Most of us, here, knew it never would — that if it showed up in any form it would be giveaways to cronies and not spending that would show up in the consumer economy. But Wall Street didn’t seem to think that on two levels:
- There was an anticipation of increased consumer spending from a stimulus that might eventually happen
- The glorious tax cuts that the GOP kept promising were just around the corner and that would drive up asset prices.
Fact, as separate from fiction is coming back:
- The economy is moving along with slow growth and that really hasn’t changed since last fall (apart from the perennial underperformance of Q1). Inflation remains really low and there is little pressure on pay.
- Those jobs are NOT coming back. Trump can try to put out the forest fire by peeing on it, but that simply isn’t going to work. (And it isn’t clear that’s what he’s peeing upon.)
- The Healthcare cuts which in turn would fuel the tax cuts just got that much more unlikely because the GOP is starting to realize that 2018 is now in doubt.
- Amazon is going to continue to eat away at brick-and-morter businesses, which will also affect employment.
So what does that mean?
Asset deflation. While not in free fall yet, the stock market is beginning to drop. The euro hit $1.13 this morning and is getting stronger. The “dipsters” (people that buy on the dips) are about to try their little moves only to discover that it didn’t work in 2008, either.
I, for one, pronounce the bull market over. I expected some kind of government shut down caused by Cruz and associated idiots as the trigger for a Recession, but now I don’t think we’ll even need that. The Trump Recession is coming.
Why am I acting like asset deflation (dropping of prices of everything from stock to property) is a big deal? A lot of baby boomers are starting to retire — 10,000/day. They’re going to be selling stuff to live off of. Who is going to buy this stuff? When you have a glut of a commodity, what happens to the price of that commodity? Unless you own real estate where the boomers want to move, the prices are going to drop. The big winners are the drug companies and the medical device companies who have what the boomers want. The big losers … I’m sure you can guess.
Welcome to the Trump Recession.
(It sucks even worse because I got laid off last summer — too early to retire and too old for a high tech job.)