QOTD: “No one has ever seen anything like this.”

Eric Peters was a great read this weekend…

“I went to sleep with a Clinton/Yellen portfolio and woke up in Trump world,” said the CIO, commiserating, in good company. No one in finance envisioned a Trump victory. Which meant we remained positioned for the status quo; modest global growth, low inflation, ultra-loose monetary policy, and bond yields artificially suppressed by central bank buying. “When you considered his populist promises, combined with a Republican House and Senate for the first time since 1928, there was just one thing to do – get the hell out.”

“Seventy percent of all new legislation for any administration throughout American history comes in the first 100 days in office,” he said. “So it’s all happening now,” he continued. “Run the numbers on this thing; $9trln of stimulus over 10yrs.” US GDP is $18trln. So $900bln per year is 5% of GDP. “Even if he does half of what he’s promised, it’s embarrassingly large.” Reagan’s stimulus wasn’t half this big. And he had to raise taxes 2yrs after cutting them because the deficits were too large. “No one has ever seen anything like this.”


wknd notes (One River Asset Management)

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