Evening in America-
I am going to do something that I’ve never done before in the history of this blog which is to dictate this post verbally. The reason simply stated is that my right hand has very bad tendinitis right now, which I’ve never experienced before but being a person who doesn’t like dealing with pain in the first place it’s fairly debilitating for my typing so, I’m resorting to the mouth and the iPhone. It won’t read quite the same as my writing, but I’m doing what I can.
The media is saturated with analysis about the election and where the media went wrong and what this new presidency will mean for America. One thing I’ve noticed is that some people seem to be creating an analog between the forthcoming Trump presidency and the Reagan presidency from the election of 1980.
I think this is wrong headed for many reasons, not the least of which is that when Reagan was elected, I think the entire debt of the country was well less then $1 trillion whereas today it is $20 trillion, and that alone creates a completely different world than the one of 36 years ago.
I would also say that in retrospect we can plainly see that Reagan entered office at the beginning of an information revolution that was far bigger than any one dared dream, and that completely changed the global economy and the prosperity of the United States in particular. A large number of people have known nothing but this phenomenal change during their lives and assume that technological revolutions take place constantly, which I think history will show is simply not the case.
My point is simply that we are not approaching the morning in America that the Reagan of the early 1980s represented but instead are facing a world for darker than any of us dare want to contemplate. At a minimum, I believe this rush into equities with the belief that we are at the beginning of a new bull market is foolhardy beyond description.
I am actually grateful for the uplift in prices we saw after the election, because it is created some phenomenal shorting opportunities. It’s another 10 weeks until Trump even takes office, but already the amount of optimism being given to him by the financial world is completely surprising, and I think the level of disappointment you will witness among these optimists will be tremendous.
I will close by saying that these thoughts are based almost entirely on the nature of the world as opposed to the nature of the forthcoming president, because irrespective of the human being that enters the office, I believe their fate is already sealed, so I frankly didn’t care that much who won the election to tell you the truth……except in as much as I don’t like seeing a blatant liar win. Personally I’m pretty sick of the whole topic at this point.