It’s political

RYANBy Guest Blogger Ryan Lewenza

In my opinion the political environment has never been as partisan and divisive as it is right now. This is particularly true in the assessment of the economy and stock market. For example, many of those on the left believe that President Trump simply inherited a strong economy and that his policies have done little to influence the strength seen in the last year and a half. While many of those on the right believe that President Trump is their economic saviour and that his policies are the sole driver of the recent strength. As I’ll show in this blogpost both of these viewpoints are flawed and stem more from one’s political beliefs than of a sound and unbiased assessment of the facts and statistics. At Turner Investments we believe strongly in balance. Both in one’s investment portfolio and in one’s political beliefs.

Let me begin by stating that people often give too much credit or blame to presidents (or Prime Ministers with washboard abs) when it comes to the economy and stock market. The reality is there are many factors at play, such as interest rates, the business cycle, corporate profits etc. that help drive the economy and markets. A president’s policies can definitely have an impact but it’s arrogance to believe that he/she has that much control over a US$20 trillion economy.

Having said that let’s compare the first 19 months of Trump’s presidency with the last 19 months of Obama’s and see what the hard data says.

Since President Trump took office the US economy and stock market have clearly accelerated. For example, US GDP growth has averaged 2.4% Y/Y under Trump’s leadership versus the 1.8% Y/Y average under President Obama in his final 19 months. The US stock market has also benefited under President Trump with the S&P 500 returning 17.3% annualized versus 8.8% under Obama. Two gold stars for Trump!

However, one important area where things have not significantly improved under Trump is in job growth. He may not want to hear this given that he once boasted “I will be the greatest jobs president that God has ever created.” Modesty is clearly not one of Trump’s strengths! Since 2017 the US economy has added a solid 3.7 million jobs, slightly below the 3.8 million jobs created under Obama in the preceding 19 months.

As I’ll cover shortly Trump definitely benefitted from inheriting a strong US economy but the facts are, the US economy and stock market have improved under his leadership, which shouldn’t be a surprise given his pro-growth policies of lower taxes and deregulations. As much as it might pain those on the left to hear this, it is demonstrably true that the economy has improved under his leadership and for that I believe Trump deserves some credit.

Now before readers jump to conclusions and claim that I have a lovefest with Trump, this is definitely not the case as I disagree with him plenty. Also I believe that he’s had some real luck on his side (unlike his casinos, university and airlines etc.) with the US economy already doing quite well when he took over.

President Obama became president just as the US economy was enduring its most challenging downturn in nearly a century. The economy was teetering on the edge of a complete financial meltdown and he along with congress made some bold policy decisions that helped rescue the US economy. This is largely why we are where we are today. The Obama administration implemented policies like the American Recovery and Reinvestment Act, bailed out the US car companies saving hundreds of thousands of jobs, and enacted critical financial reforms that helped restore confidence in the finance sector. Most importantly, he helped lead the US economy out of the doldrums and into the second longest economic expansionary period (now its 110th month) since 1950.

Those on the right who dislike President Obama and his leadership are clearly entitled to their views but they are not entitled to their own facts. Over President Obama’s two terms the US economy created over 10 million jobs, which helped drive down the unemployment rate from a high of 10% in 2009 to 4.7% at the end of his presidency. And over this period the S&P 500 rallied an incredible 193% or 14.4% annualized. Not a bad economic legacy if you ask me!

Below you can see how the unemployment rate steadily declined under President Obama and how it has continued under President Trump. This illustrates why I believe President Trump inherited a strong economy. Yes, Trump’s policies have contributed to the gains, but to say it’s been solely due to him and his policies is not supported by the data. Nonetheless, I believe both deserve some credit for this great achievement.

US Unemployment Rate Under Both Presidents

Source: Bloomberg, Turner Investments

Now before you anti-Obama readers slam me for missing half the story, my one key complaint with Obama has been the doubling of US government debt over his tenure. Below I chart out US government debt, which doubled under President Obama from roughly US$10 trillion to US$20 trillion by the end of his term. As a percentage of GDP, debt increased from roughly 60% to over 100% currently. Sure some of this can be blamed on the financial crisis, but Obama (and congress) made little attempts to rein in spending and balance the books.

That said, the Republicans cannot take a victory for being parsimonious as US debt doubled under President Bush and deficits are skyrocketing under Trump and the current Republican congress. Basically, neither party is willing to address the excessive spending and deficits since that’s now how politicians get elected these days.

US Government Debt Levels

Source: Bloomberg, Turner Investments

Look I’m not trying to sway anyone’s political views with this blogpost. Whether you stand on the left or the right, that’s not the point. What I am trying to do is highlight the hypocrisy and partisanship behind many political views, particularly in the assessment of the economy. As a financial analyst I try to remove my political biases in assessing the economy and making forecasts, which I have found has led to better financial outcomes and performance. That’s the key point.

Ryan Lewenza, CFA,CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Vice President, Private Client Group, of Raymond James Ltd.

 

82 comments ↓

#1 Cici on 08.18.18 at 1:55 pm

Good assessment and I fully agree. The only question I have is how sustainable is all of this “acceleration” and “growth.” It’s obviously costing a lot of debt, leaving me wondering what the aftermath is going to look like if it keeps running away out of control…

#2 DON on 08.18.18 at 2:10 pm

Clowns to the right of us jokers to the left…stuck in the middle with you.

Good balanced blog post Ryan.

Cheers.

#3 Westcdn on 08.18.18 at 2:40 pm

I am in total agreement with Ryan. I do get frustrated with today’s political leadership and lash out now and again. I have my views and will express them usually in the form of a rant. I also realize I could do worse and I am just not ready as a public leader. Most people don’t like my cooking. One of my few friends says the shy go hungry.

I strongly believe higher current inflation is temporary
and we will move back to dis-inflation within a year. I fear not many more 0.25% interest rate increases.

#4 Capt. Obvious on 08.18.18 at 2:43 pm

But Ryan, Presidents and governments in general have very little to do with job growth. You know this. Short of massive government intervention in the job market through government hiring, job growth is mostly a private sector phenomenon. Full marks go to the central banks for reflating this thing after it looked like the world economy was going to implode on itself.
Government spending… well let’s just say people get the government they deserve.

#5 Catalyst on 08.18.18 at 2:47 pm

Number of people on food stamps at record levels, ‘unemployment’ calculated much differently than Canada which would show much higher unemployment, and continue depressed wages indicate the economy is not doing that well.

All that has happened is trump is stealing from the future tax payers to give directly to corporate america through tax cuts which largely went to share buybacks.

If the stock market is the barometer for a healthy economy, what does that say about ours? US stock market is only doing well because global investment dollars still go there ignoring ridiculous valuations and insurmountable debt levels.

The republicans bleated on and on about budget deficits and shut down the government multiple times over giving money to help improve healthcare but if its for a corporate tax cut they are willing to run trillion dollar defecits. Its disgusting behaviour by America right now and when sentiment turns, it will be quick.

#6 mike from mtl on 08.18.18 at 2:49 pm

Love it, borrow 1$ to make 1$, that’s Amazon math if I wouldn’t be mistaken.

#7 X on 08.18.18 at 2:53 pm

When I first read the title of today’s post (before seeing the pic) the first thing that came to mind was when T2 cut the TFSA limits….still bitter about that.

#8 AK on 08.18.18 at 3:21 pm

“For example, many of those on the left believe that President Trump simply inherited a strong economy and that his policies have done little to influence the strength seen in the last year and a half. ”
=====================================

Total BS. Had Clinton won, we would have already been in a recession.

#9 Freebird on 08.18.18 at 3:38 pm

Off topic but RESPECT to Queen of Soul Ms Aretha!! RIP…

https://youtu.be/6FOUqQt3Kg0

#10 Ryan Lewenza on 08.18.18 at 3:49 pm

Capt Obvious “But Ryan, Presidents and governments in general have very little to do with job growth. You know this. Short of massive government intervention in the job market through government hiring, job growth is mostly a private sector phenomenon.”

I did mention that people often attribute too much to presidents or PMs. But policies coming from Washington or Ottawa can play a role in private sector job growth. Take the US corporate tax cut. By cutting taxes and increasing US corporate profits this likely contributed to some US job growth over the last 19 months. – Ryan L

#11 Ryan Lewenza on 08.18.18 at 3:53 pm

Catalyst “All that has happened is trump is stealing from the future tax payers to give directly to corporate america through tax cuts which largely went to share buybacks.”

You perfectly reinforce the key message of today’s blogpost. Thank you! – Ryan L

#12 FIVE FINGERS WATSON on 08.18.18 at 4:06 pm

#23 TurnerNation on 08.17.18 at 5:23 pm
How long until the new owners of Smoking man’s sht Long Branch bung email this weblog over their losses?
————–

Who would admit to buying this?

#13 crowdedelevatorfartz on 08.18.18 at 4:07 pm

Another great post.
Batting 1000.
Keep it up.

I spoke to a Californian tourist the other day.
He was retired, mid sixties, well educated, ex military, not a Trump fan.
I mentioned the US debt and he agreed.
“Its going to bite us in the ass someday soon.”

#14 grandehui on 08.18.18 at 4:09 pm

“I’m not trying to sway anyone’s political views with this blogpost”

That’s fine. There are considerations for forming one’s political opinion that are much more important than the matter you are discussing in your blogpost. Like who is responsible for more wars, death, and suffering, including that of brown people in the middle east. So far Trump has not come anywhere close to Obama’s and H. Clinton’s achievements.

#15 young & foolish on 08.18.18 at 4:13 pm

“Basically, neither party is willing to address the excessive spending and deficits … ” — Lewenza

How about addressing the possible connection between the deficit and economic growth (or the socialisation of the economy)?

#16 Out Of Work CEO, Will Travel on 08.18.18 at 4:19 pm

I hear the dog whistle Ryan….Trump on everyone’s lips. Any analysis of our own “made in Canada” econorama business news is verbotten. Who wants to get depressed when it doesn’t pay? All that oil and an endless tribe of believers telling us to go back to the “horse and buggy.” The Fresh Air folks might get their wish and then see where the money flows……

#17 Camille on 08.18.18 at 4:20 pm

Comedy and satire are a subtle thing
They can be divided into multiple genres based on the source of humor, the method of delivery, and the context in which it is delivered.
These classifications overlap, and most comedians can fit into multiple genres.
However, traditional political satire is dead – the people, not politicians, should be the butt of jokes now. The left-wing sense of what “satire” is has been set in stone since the boom in the sixties, but is no longer effective. Mock the people for that is where the power is.

#18 young & foolish on 08.18.18 at 4:23 pm

“US stock market is only doing well because global investment dollars still go there ignoring ridiculous valuations and insurmountable debt levels.” — Catalyst

Interesting point. But on this blog it seems like those “ridiculous valuations” are fine for your S&P ETF but not for your RE holdings.

#19 Ryan Lewenza on 08.18.18 at 4:27 pm

Ak “Total BS. Had Clinton won, we would have already been in a recession.”

That is a counterfactual argument and has no economic basis to support it. Beyond your clear disdain for Hillary what policies or positions can you point to that would support that claim? Moreover she would have likely continued with Obama’s policies which as I outlined helped support the second longest economic expansion in history. – Ryan L

#20 Andrewski on 08.18.18 at 4:37 pm

Great analysis Ryan. Seems like too much opinion in debate these days & not much fact to back it up.

#21 dakkie on 08.18.18 at 5:08 pm

Middle Class, Beware – Housing Is 81% Out of Reach!

http://www.investmentwatchblog.com/middle-class-beware-housing-is-81-out-of-reach/

#22 Stan Brooks on 08.18.18 at 5:10 pm

Canada’s tax system unfairly favours wealthy, poll of CRA auditors suggests

https://ca.news.yahoo.com/news/canada-apos-tax-system-unfairly-195123349.html

OTTAWA — A recent union-sponsored survey suggests an overwhelming majority of federal government auditors believe Canada’s tax system unfairly favours the wealthy over average Canadians.

==========================

Basically you are f…ed if you are middle class in this place. If you are rich, with an offshore account or rigging gas and bread prices you are politician’s best friends, their buddy and they will never ever come after you.

But if you are doctor, plumber, real estate flipper or renting your basement, watch out.

#23 Marco on 08.18.18 at 5:30 pm

America was never that great. Lost every war after second WW (oops they won over Grenada). That tribal version of capitalism has no chance to survive, all that crap about classes in time when the Prince married a starlet… Scandinavia, Germany, France.. they are social democracies and they rule. Driving Maserati on potholed road is not a merit. Having Autobahn is…

#24 akashic record on 08.18.18 at 5:41 pm

– the S&P 500 rallied an incredible 193% or 14.4% annualized

– US government debt, which doubled from roughly US$10 trillion to US$20 trillion

Hi Ryan,

Thanks… a couple of simple questions, to understand the past and for the clues to watch in the future:

– How does the 193% S&P 500 growth relate to the doubled US$20 trillion debt?

– Which particular economic or social policies played the main roles in in the S&P 500 growth and the government debt growth?

– Would it make sense, that the time of stellar economic growth is the best time for stellar public debt reduction?

– Where is the seemingly obvious disconnect and which particular policies are responsible?

Thanks.

#25 David McDonald on 08.18.18 at 5:52 pm

Republicans blocked Obama’s infrastructure spending on the pretense it would increase the deficit. Under Trump the Republicans dropped all their fake concern about deficits to give a huge tax break to the one percent. The stimulus worked and it’s now party time.

But for how long? There is little evidence of investment in new capacity and American infrastructure is more and more delapitated. Most of the money was spent on stock buybacks. Once the effects of the stimulus wear off I expect a recession.

#26 Dave on 08.18.18 at 6:14 pm

I doubt the BOC will do a .5 increase in December…too close to xmas, so it will happen in Sept or 1st quarter 2019.

#27 mike on 08.18.18 at 6:19 pm

Obama took office at almost the nadir of the stock market meltdown following financial crisis, stocks were dirt cheap (CAPE around 13) and due to take off at some point.

Crediting Obama is a bit specious, fact is it was good timing.

#28 young & foolish on 08.18.18 at 6:39 pm

“Driving Maserati on potholed road is not a merit. Having Autobahn is…” — Marco

Yeah, you should try driving around downtown Toronto … pathetic! You need an off-road.

#29 Nonplused on 08.18.18 at 6:43 pm

I think the trend going forward will be that government debt doubles every 8 years. I don’t see what can stop it. Everything that can be taxed is already taxed, so revenue can only grow with GDP. Spending continues to spiral out of control and that can only get worse as the boomers all retire.

And I don’t expect a politician to step forward with a magic plan to fix it either. Instead we get treated to fairy tales like “Universal Basic Income”. How in the heck are they going to pay for that when they are already running huge deficits? Now the kids want “Free Education” but the education system especially in the US is already a big boondoggle. Can you imagine what will happen if the US government has to pay the tuition? For everyone? I shudder to think. And the argument that the US economy will be rewarded in kind with such a highly educated workforce is a myth, many of those “free” degrees will be in “gender studies”.

I don’t know what sort of an event will bring an end to it all, but it seems to me government debt cannot double every 8 years indefinitely while GDP labors along at 2%. But I don’t know what stops it. Or if anything even can. It’s structural.

#30 Ryan Lewenza on 08.18.18 at 6:46 pm

akashic record “Thanks… a couple of simple questions, to understand the past and for the clues to watch in the future:

– How does the 193% S&P 500 growth relate to the doubled US$20 trillion debt?

– Which particular economic or social policies played the main roles in in the S&P 500 growth and the government debt growth?

– Would it make sense, that the time of stellar economic growth is the best time for stellar public debt reduction?

– Where is the seemingly obvious disconnect and which particular policies are responsible?”

Stock prices are in part driven by liquidity. As deficits rose and the Fed pumped trillions of dollars into the markets this helped drive stock prices higher. Regarding specific policies, I would say lower interest rates from the Fed, fiscal stimulus through more government spending (the American Recovery Act for example), and the bailouts of the banks and auto companies. These helped restore confidence in the financial markets and set the stage for this ongoing recovery. I was against the bank bailouts initially but then I changed my tune as the banks payed much the capital back and I saw first hand the recovery in the markets from these actions. For your third question I would agree with this as this is the root of Keynesian economics. Add stimulus in downturns then cut back spending and the built up debt in the recovery. The first part is easy but no one ever follows through with the second part which is in part why the US is over $20 trillion in debt. Regarding your last question I’m an economist and financial analyst so I’ll stick to what I know and avoid answering questions about ethics and which policies are “responsible”. – Ryan L

#31 BobC on 08.18.18 at 7:00 pm

I think everybody understands that Trump is nothing more then a speed bump on the road to hell. When he’s gone we’ll revert back to the socialism everybody seems to crave. The U.S. is dead. Glad I’m 69 y/o and made mine.

#32 earlybird on 08.18.18 at 7:03 pm

Wow…well done, what a great post!

#33 Danny on 08.18.18 at 7:05 pm

Now that is what I called an honest and fair presentation.

As you say “unlike his casinos, university and airlines etc.” when Trump failed so many of his investors in those many I believe possibly planned bankruptcies….there will be in the near future……more real assessment of the illegal means employed by Trump incorporated as times goes by.

Trump and family have kept not only their tax returns secret but also who their financial backers really were after the bankruptcies and when the American Banks drove him into the streets with a message….”don’t expect us to back a company that often goes bankrupt.”

That is when the Russian Mafia started to buy in Trumps businesses with cash money…..that is very hard to trace.
White collar crime is very hard to convict.

The question will be in a few years…will the new American King of inflation and tariff and spending deficit cause hardship so deep that the recovery could be a long one when something turns sour.

I believe that Garth and you have often touched with great concern on the historically new levels of private and now public debt….the question is will it have a single tipping point or hopefully just take many years to pay back….so that future generations will not have any inheritance from their parents.

Surely the degree of debt must have results that some will suffer from…..otherwise those who wrote extensively on the problem of debt were wrong over the centuries.

Remember the Roman Empire it is believed stretched itself too much and then petered out. So why not now?

In two more years the chips will fall…the question is will it be a bang?

Having a president with a long life of corruption who has been willing disregarding the American intelligence community can’t end well with his public lies about Russian involvement in a democratic election. Liars always know the truth.

In time truth reveals itself…..this real estate developer is way beyond his abilities.

#34 Smudgekin on 08.18.18 at 7:34 pm

Typically Canadian our Ryan’s tuned to CNN where’s the local?

Trump is to America what Franco was to Spain. A polarized divider. Mind your bones don’t get eviction Don.

#35 Tony on 08.18.18 at 7:44 pm

Trump takes credit for a stock market that has been rigged to the nth degree the past 10 years by the central bankers. He also takes credit for news all based on fabricated data. One has only to travel to all the cities in America to find out the real picture. As well the world economy has never been worse.

#36 David on 08.18.18 at 7:51 pm

Lot of people scratching their heads about what is going on these days. Apple has a Trillion dollar market cap and 375 billion balance sheet assets? When I read about people in Toronto with second and third mortgages and Helocs I just tell myself yikes. All these fancy vehicles with 8 year sub prime loans. Personally just talking to my friends at the coffee shop it is like there is a fateful pebble that will start an avalanche. These mortgages are taking on all the charm of roadside bombs. Long way from the skids.

https://wolfstreet.com/2018/08/18/inflation-interest-rate-mortgage-types-in-canada-house-price-bubble-variable-adjustable-fixed-rate/

#37 AK on 08.18.18 at 8:00 pm

“#19 Ryan Lewenza on 08.18.18 at 4:27 pm
Ak “Total BS. Had Clinton won, we would have already been in a recession.”
That is a counterfactual argument and has no economic basis to support it. Beyond your clear disdain for Hillary what policies or positions can you point to that would support that claim? Moreover she would have likely continued with Obama’s policies which as I outlined helped support the second longest economic expansion in history. – Ryan L
===================================
Under a Clinton administration, there would not have been tax reform or any cuts to regulations. Therefore, growth would have stalled and we would have been in a recession by now.
Having said that, wait until the mid terms are out of the way and we will see the U.S. boom to continue going forward.
Infrastructure spending will probably move forward in 2019.
Like Larry Kudlow says, “The U.S. economic boom is in the early stages and it has a long way to go”.

#38 Yuus bin Haad on 08.18.18 at 8:00 pm

I don’t think Trudeau has those abs no mo’

#39 Scared Billionaire on 08.18.18 at 8:03 pm

Take the keys away – QUICK

#40 Muttley O'Toole on 08.18.18 at 8:07 pm

But would it be fair to say that Main Street, long ignored by previous admins, has finally benefited under Trump?
IMO, middle America was being squeezed out of existence.
Because there was no breakdown of job statistics under Obama (and Trump) it may well be most jobs created previously were non-productive (civil service, etc.) versus e.g.truck driving/haulage productive jobs under Trump.

#41 Long-Time Lurker on 08.18.18 at 8:19 pm

#132 EdmontonRenterBuyer on 08.18.18 at 1:06 pm
Hi blog dawgs
Ive been a long term renter in toronto. Saving, saving, saving. The wife and i now have a nice low 6 figure cash and stock portfolio. Now we live and continue to rent in edmonton, which is a buyers market. However prices continue to float slowly downwards.

If im interested in owning, when is the right time to jump into a slowly declining price market as the rates go up?

>Generally, when interest rates stop rising and prices stop dropping for a year or two.

A balanced and objective analysis there, Ryan. By the way, how’s the beard going? Might as well let your hair grow long, too. I’m sure your clients will love it!

#42 Lorne on 08.18.18 at 8:35 pm

” At Turner Investments we believe strongly in balance. Both in one’s investment portfolio and in one’s political beliefs.”
………
Not sure this holds for everyone involved.

#43 Skip on 08.18.18 at 8:38 pm

You don’t get it. Read Qanon.app

#44 604renter on 08.18.18 at 9:27 pm

As the expat American in Canada – thanks for the alternate viewpoint on trump. Lets not forget that as a president one needs to be more than just successful with the economy. One also needs to : set an example of decency, stand for what is right, set an example. Referring to US citizens as ‘dogs’ because they happen to be black, abusing power and retracting security clearance from an American hero hecause he spoke out against you, or seperating children from their parents – is beyond shameful. He may be ok at finance, but he has never been presidential material.

#45 Darryl on 08.18.18 at 10:03 pm

So Ryan
Just to stay slightly Canadian .
Would you agree that Justin inherited an expanding economy from Harper as well. And that he will piss it all away before he’s done ?

#46 Wrk.dover on 08.18.18 at 10:10 pm

T rump says he will reschedule the military dictator parade the following year or later, when the costs come way, way down.

Looks like Marks deflation call is going to gain some very serious traction action.

Or they are both tied to the same brush.

#47 Craig on 08.18.18 at 10:18 pm

Re #19

http://www.usdebtclock.org/index.html

Trumps big tax cuts are simply kicking the bucket down the road . Projected to run well over a trillion dollar deficit this year alone . Unprecedented and unsustainable. As for Kudlow , sorry but I can’t take an eccentric who had a $100,000.00 a month cocaine habbit very seriously. Larry Kudlow gets security clearance only because he is a Trump “Yes Man” but the former CIA director John Brennan who set up the plan to take out Bin Laden get’s his security clearance revoked?

#48 crowdedelevatorfartz on 08.18.18 at 10:30 pm

@#45 Darryl
“Would you agree that Justin inherited an expanding economy from Harper as well. And that he will piss it all away before he’s done ?’
+++++

“Yes.
Because its 2019……”

#49 Reality is stark on 08.18.18 at 10:31 pm

It’s all about buying time folks.
The Bernanke monetary policy is about tomorrow.
The Europeans reacted too slowly but eventually opened up the monetary taps.
When India rocks both Obama and Trump get vindicated. That is how the world works. The east will be the growth engine. When your money is invested in corporate America you will participate. If all your money is in local real estate you roll the dice.
What worked yesterday doesn’t predicate what will work today.

#50 Overheardyou on 08.18.18 at 10:49 pm

Quick question, if you had a some savings and wanted to lower risk but beat inflation (since HISAs suck) where would you park your money?

#51 Ponzius Pilatus on 08.18.18 at 11:17 pm

Nothing to do with Trump.
Pretty much all of the developed world is on a tear.
DAX has tripled in the last ten years.
Low unemployment everywhere.
Even Greek seems to be back on its feet.
Low interest rates and QEs are the reason.
Staggering debt all around.
Inflation is rearing its ugly head.
Joyride is over.
Time to pay the piper.

#52 Adrian on 08.19.18 at 12:15 am

Deficits by the world’s reserve currency issuer during a collapse of private credit is necessary, not undesirable.

How Austerity Works, by Professor Steve Keen
https://youtu.be/0y5rP56OX78

#53 Smoking Man on 08.19.18 at 12:30 am

The Q, Where is John Gault?

#54 Greyhelm on 08.19.18 at 1:02 am

Great post Ryan. Fair and balanced (LOL, that’s the Fox News motto – how Orwellian). I look forward to your posts every other week.

One quibble. You mention deregulation as one of the positive things Trump has done to stimulate the economy and stock market, which is not incorrect as far as it goes.

But it is far from positive on so many other levels. Regulations exist in reaction to abuses and to protect the broader public good. One of the regulations that Trump got rid of was to prevent coal companies from dumping waste into local waterways. Another he is currently attacking are California’s air emission standards for vehicles, which have compelled the auto industry, not just in the US, but worldwide, to produce cleaner, more fuel-efficient vehicles that produce less air pollution.

Regulations prevented companies from using CFCs that were destroying the earth’s ozone layer. In the past, they also eliminated child labour and said you cannot pay women less for equal work of equal value.

Sure corporations can make more profits without regulation. But that is a race to the bottom, and not in the interests of the greater good.

And the evidence is clear that the majority of profits from this latest round of tax cuts and deregulation have gone NOT to wage increases, R&D, or other things that benefit the bottom 90% of the population, but to share buy-backs which benefit stock-holders, in particular executives who are compensated in stock options. Inequality increases yet further.

But as I said, this is just a quibble with an otherwise excellent post.

#55 Pipeline Gender Dystopia on 08.19.18 at 1:27 am

Meanwhile we are worrying about the gender of pipelines in Bill C-69

Factors — impact assessment
22 (1) The impact assessment of a designated project must take into account the following factors:

(s) the intersection of sex and gender with other identity factors;

Unreal…. nothing will ever get built in canuckistan again……. and NAFTA is toast toast toast

#56 Smoking Man on 08.19.18 at 1:56 am

So I’m hiting the jack hard tonight. Striking up a conversation with a social studies prof from birkly. She gave me a lecture on the dangers of straws. I said its the only way I know how to pick plak off my teeth

I blew smoke in her face. Then stopped on my smoke with my flip flops. She went nuts, reported me to her husband.

He faces me down. I take the shades off. Give the dude with 20 lbs on me with 20 years younger. My eyes . he looked into em.

Same eyes when I played hockey. He’s going back to his room, not getting laid. He did not do shit.

Woman only like bad boys. They hate wimps.

Please correct me if I’m wrong here.

#57 jerry on 08.19.18 at 8:34 am

Remember that in North Korea and China there is no Right or Left, no partisanship and no divisiveness. There is no deficits, no complaints of wage growth, and no inheriting of poor economies.

There are no complaints.

In America………you can have complaints.

#58 The Fat Lady on 08.19.18 at 9:04 am

INVESTMENT BANKERS influence and run the economy.

Nathan Rothschild: “Give me control of a nation’s money and I care not who makes its laws.”?

Prime Ministers and Presidents alike are just puppets.

The rich who really run the earth always benefit.

#59 jess on 08.19.18 at 9:40 am

One effect of Proposition 13 and the inheritance tax break has been to create generational inequities between those who have owned homes and those who haven’t. The laws place no limits on how many descendants can take advantage of the benefit, so future generations of Californians whose ancestors purchased houses decades ago will continue to pay property taxes based on values established in the 1970s.

the inheritance tax break, The Times has found, has allowed hundreds of thousands — including celebrities, politicians, out-of-state professionals and some of California’s most prominent families — to avoid paying the higher taxes owed by newer homeowners. The tax break has deprived school districts, cities and counties of billions of dollars in revenue.

https://www.bakersfield.com/ap/national/california-homeowners-get-to-pass-low-property-taxes-to-their/article_99aeb264-6ce3-5425-8f0f-c176648c24b8.html

#60 crowdedelevatorfartz on 08.19.18 at 10:01 am

@#56 Smoking Man
“He’s going back to his room”
+++++

To get his Glock 9 ? (it IS the States…..).

#61 TurnerNation on 08.19.18 at 10:03 am

60th? Anyway, TDS is strong. People must learn to love Emperor Drumpf.

WW2 was all about building Germany in an economic powerhouse. Our elites love their walls (hi T-rump) so Germany was divided into East, West. (As we see with Korea N-S today).
This allowed them the build: IBM, Bayer-Monsanto, Thysen Krupp, BMW and so on.

All the top kamp doctors, media mind controllers and scientists were lovingly brought to USA once the show trials ended. Giving us Nasa, Disney and so on.
Learn from history; repeat:
https://en.wikipedia.org/wiki/Operation_Paperclip
(And Bush dynasty was well rewarded with high positions – to this day.)

Our Germanic Queen does approve.
https://en.wikipedia.org/wiki/House_of_Windsor

“The House of Windsor is the reigning royal house of the United Kingdom and the other Commonwealth realms. The dynasty is of German paternal descent and was originally a branch of the House of Saxe-Coburg and Gotha”

– A supremely ballin’ USA-working REIT is HOT.UN.
I’m in from $8.20 on a hunch – #yieldhound, #schlockpicker
– Huge hotels in USA they run https://www.ahipreit.com/portfolio/property-portfolio/

#62 technical analysis? on 08.19.18 at 10:04 am

discussing politics is a waste of time when trading markets and investing. the only thing that matters is what’s going on with the charts. you can’t predict the future and you can’t predict what the idiots in charge will do. focus on the charts.

#63 Ryan Lewenza on 08.19.18 at 10:06 am

Darryl “Just to stay slightly Canadian. Would you agree that Justin inherited an expanding economy from Harper as well. And that he will piss it all away before he’s done?”

Oh most definitely Trudeau benefited from a decent economy under Harper. In particular, since Harper was so focused on deficits Canada’s Federal government debt was fairly low (debt to GDP ratio near 40%) this gave the green light to Trudeau ramping up spending and debt to stimulate the economy. We’ll have to see how the economy performs over his tenure. Personally I don’t think it will be a disaster but we’ll just have to see. – Ryan L

#64 crowdedelevatorfartz on 08.19.18 at 10:12 am

@#53 Smokey
“Where is John Gault?”
+++++

Residing in a mediocre novel written by a pseudo sci-fi hack in the 50’s who didnt do much else after that………?

#65 Ryan Lewenza on 08.19.18 at 10:16 am

Greyhelm “One quibble. You mention deregulation as one of the positive things Trump has done to stimulate the economy and stock market, which is not incorrect as far as it goes. But it is far from positive on so many other levels. Regulations exist in reaction to abuses and to protect the broader public good. One of the regulations that Trump got rid of was to prevent coal companies from dumping waste into local waterways. Another he is currently attacking are California’s air emission standards for vehicles, which have compelled the auto industry, not just in the US, but worldwide, to produce cleaner, more fuel-efficient vehicles that produce less air pollution.”

I couldn’t agree with you more. Some of the changes made from the EPA were terrible and will have long term consequences. I think Scott Pruitt was a loathsome individual. But I was referring to the economic impact of generally lower regulations. The lower regs reduce costs, boosts corporate profits and can stimulate economic growth, in the short-term at least. As a financial analyst and a person managing the savings of hundreds of Canadian families this always has to be my focus. They don’t pay me for my political or social views. But I agree with you on some of those regulations rollbacks. – Ryan L

#66 Renter's Revenge! on 08.19.18 at 10:17 am

#50 Overheardyou on 08.18.18 at 10:49 pm
“Quick question, if you had a some savings and wanted to lower risk but beat inflation (since HISAs suck) where would you park your money?”

There’s nowhere to do that right now. Financial repression is still ongoing.

#67 Ryan Lewenza on 08.19.18 at 10:21 am

Overheardyou “Quick question, if you had a some savings and wanted to lower risk but beat inflation (since HISAs suck) where would you park your money?”

A mix of short-term government bonds, corporate bonds, a bit of high yield, some preferred shares and a small exposure of REITs. We have an income portfolio built of these assets and the yield is 3.5% and I estimate a 4% total return over the long-run, twice what you can get in GICs. – Ryan L

#68 crowdedelevatorfartz on 08.19.18 at 10:25 am

@#55 Gender Dystopia
“Factors — impact assessment
22 (1) The impact assessment of a designated project must take into account the following factors:

(s) the intersection of sex and gender with other identity factors;
++++++
Yep.
Apparently the US NAFTA negotiators burst out laughing when Freeland began babbling on about gender identity issues in the trade talks.
They walked out.
Cold cruel real life reality meets posturing intellectual political correctness.
Guess which one will eventually win in the tanking economy in an election year coming up fast……..

That being said.
Freeland has been noticeably quiet since her recent Saudi “equality” outbursts.
Does Trudeau have her muzzled and on a short leash?
Or would Butz play the “tough guy” and shut her down since he is the real power in the PMO’s office…….

#69 crowdedelevatorfartz on 08.19.18 at 10:58 am

Hmmmm.

The BC NDP are thinking of passing a retro active Law to force the previous Liberal govts to hand over confidential documents on casino Money Laundering and how they did( or didnt) deal with the problem…….

https://www.news1130.com/2018/08/19/attorney-general-hints-law-force-last-government-hand-secret-documents/

One would love to see former Preem Christy Clark, under oath, on the witness stand, being hammered about all sorts of back room dealings…….
BC Rail sale, Casino Gate, Mt Polley but a few.

I can dream cant I?

#70 Smoking Costanza Man on 08.19.18 at 11:14 am

#56 Smoking Man on 08.19.18 at 1:56 am

So I’m hiting the jack hard tonight. Striking up a conversation with a social studies prof from birkly. She gave me a lecture on the dangers of straws. I said its the only way I know how to pick plak off my teeth

I blew smoke in her face. Then stopped on my smoke with my flip flops. She went nuts, reported me to her husband.

He faces me down. I take the shades off. Give the dude with 20 lbs on me with 20 years younger. My eyes . he looked into em.

Same eyes when I played hockey. He’s going back to his room, not getting laid. He did not do shit.

Woman only like bad boys. They hate wimps.

Please correct me if I’m wrong here.
……..

Well you are bald like george….

https://www.youtube.com/watch?v=lDLLPW20y3U

https://www.youtube.com/watch?v=C02lvgmm4DQ

#71 Ponzius Pilatus on 08.19.18 at 11:47 am

The Old Man on the Posporus is very sick.
And Trump’s pulling the life support.
External debt about 500 billion, half of GDP.
All payable in USD.
What if Turkey defaults and other “Emerging Economies” follow?
China?

#72 NoName on 08.19.18 at 12:18 pm

#70 Smoking Costanza Man on 08.19.18 at 11:14 am

this one is better
https://www.youtube.com/watch?v=C02lvgmm4DQ

#73 jess on 08.19.18 at 12:33 pm

He (trump)may be ok at finance, huh? who loaned him his money?

loyalty should never override law…

===============================

The illth of nations

“ecological economists, Daly argued, are even looking for this optimal scale of economy, beyond which expansion will increase environmental and social costs more than it increases production benefits. This overreaching state he called “uneconomic growth” which leads to increasing “illth,” a term coined by Victorian Age social critic John Ruskin to define economic and social activities that led to no social good. In Daly’s lexicon, the Bizarro World word depicts the particular social “bad” of environmental pollution and depletion.”

=====================

from wiki: “In1860, John Ruskin published a critique of the economic concept of value from a moral point of view. He entitled the volume Unto This Last, and his central point was this: “It is impossible to conclude, of any given mass of acquired wealth, merely by the fact of its existence, whether it signifies good or evil to the nation in the midst of which it exists. Its real value depends on the moral sign attached to it, just as strictly as that of a mathematical quantity depends on the algebraic sign attached to it. Any given accumulation of commercial wealth may be indicative, on the one hand, of faithful industries, progressive energies, and productive ingenuities: or, on the other, it may be indicative of mortal luxury, merciless tyranny, ruinous chicanery.
===================
Social theory
Ruskin looks at the social and economic implications, discussing issues such as who should receive a living wage. This essay is very critical of capitalist economists of the 18th and 19th centuries. In this sense, Ruskin is a precursor of social economy. Because the essay also attacks the destructive effects of industrialism upon the natural world, some historians have seen it as anticipating the Green movement.[1]
https://en.wikipedia.org/wiki/John_Ruskin

https://en.wikipedia.org/wiki/Unto_This_Last

#74 akashic record on 08.19.18 at 2:32 pm

Life after Google….

from George Gilder, former Reagan advisor, who not only predicted smart phones in 1990, as they are today, but he also predicted that they wouldn’t be built on Microsoft technology.

He is talking about the future after the Google version of Marxism, that hijacked the originally decentralized Internet, that now threatens democracy, by Google and other tech companies claiming the role of validating identity, giving or denying permission of Internet content.

He describes blockchain as the technology that reclaims and rebuilds the Internet as a decentralized stack, liberated from Google’s version of Marxism.

https://www.youtube.com/watch?v=ZWKWbHmWAcY

#75 SW on 08.19.18 at 2:37 pm

#56 Smoking Man on 08.19.18 at 1:56 am
“I blew smoke in her face. Then stopped on my smoke with my flip flops. She went nuts, reported me to her husband.”

That did make me laugh, dear…the only purpose to keep a man around is to set him on other men who displease you? I thought that’s what dogs were for!

Lucky she didn’t grind her stiletto into your foot, accidental, like. Good for your next novel.

#76 jess on 08.19.18 at 3:17 pm

traders as “snipers” ?

https://www.theguardian.com/business/2017/may/07/whats-it-like-to-lose-350m-pounds-rogue-trader-barometer-of-fear
========================
mental health – S.L.S. – “shit-life syndrome”
: the situation where someone has so many things not working out for them that even beginning to change anything is often wiped out by the remaining factors causing them harm.

#77 Gravy Train on 08.19.18 at 5:23 pm

#64 stinky packed lift on 08.19.18 at 10:12 am
“@#53 Smokey
Where is John Gault?
+++++

Residing in a mediocre novel written by a pseudo sci-fi hack in the 50’s who didn’t do much else after that………?”

I think you’re being too dismissive of Ayn Rand. While arguably she may not be a philosopher of the first rank, she did make original contributions to ontology, epistemology, ethics, aesthetics and political philosophy. Her books always made me think, and forced me to clarify my own positions on various philosophical matters. To me her writing is reminiscent of Sartre and Nietzsche, although I suspect she’d reject being lumped in with the existentialist school of thought.

As an aside, I can certainly relate—from my own personal circumstances—to her hero Howard Roark in her novel The Fountainhead.

#78 Steven Rowlandson on 08.19.18 at 8:48 pm

Given that all the legal political parties had a hand in screwing up all the western nations beyond all repair political unity is the last thing we need. We need to get rid of all the bums on the ballots and do something different and tht doesn’t include having democracy or communism. The rule of thumb is you don’t count on those who made the mess to clean it up. They don’t want to do it and they won’t do it! If I was wrong there would be no problem.

#79 Remembrancer on 08.20.18 at 11:03 am

#77 Gravy Train on 08.19.18 at 5:23 pm

You left out…

and darling reference for all sorts of self-styled pseudointellectual so-called “libertarians” most of whom have probably not read the book(s)… nor would last 10 minutes in the world they seek because they all have their own self-serving definitions of what it means…

Ya – hot button + too much (fair trade) caffeine…

#80 DJIM on 08.20.18 at 11:42 am

Not a big fan of either Obama or Trump. However, Obama’s economic policies were generally well considered, and focused on helping all Americans, albeit with a generous helping to the 1%. This resulted in the economic turnaround you noted. Trump, on the other hand, is focused solely on millionaires and billionaires. He has ridden Obama’s thoughtful economic policies, with tax incentives designed to be pumped back into the stock market rather than creating any kind of buying power among the 99%. He has also killed all measures designed to protect people or the environment, which yes, cost money, and so pumped up profits. So, stocks look great, corporations look great, military looks great, but none of the economic fundamentals have been addressed, and the environment is a mess waiting to be dealt with by incredibly expensive measures down the road. In short, Obama vs. Trump is foresight vs. short sight.

#81 Overheardyou on 08.20.18 at 2:23 pm

#67 Ryan Lewenza on 08.19.18 at 10:21 am
Overheardyou “Quick question, if you had a some savings and wanted to lower risk but beat inflation (since HISAs suck) where would you park your money?”

A mix of short-term government bonds, corporate bonds, a bit of high yield, some preferred shares and a small exposure of REITs. We have an income portfolio built of these assets and the yield is 3.5% and I estimate a 4% total return over the long-run, twice what you can get in GICs. – Ryan L

——–

Thank you for your advice! It’s much appreciated

#82 James Mulvey on 08.20.18 at 3:44 pm

Don’t be so afraid to take a political stand. Facts are facts.