Global Markets, Initially Shaken, Edge Higher After Trump Victory
nytimes.com
nytimes.com
However, one thing that seemed to make them happy was the stock markets. "Oh look, stocks are crashing worldwide" and they kept belaboring that point, as a validation in a way "see we warned you how bad Trump was" kind of sentiment.
For example US Steel (X) jumped a whopping 20% since yesterday. Something tells me they probably won't be focusing on that.
One wonders, does anyone there look around and say "What have we become? Are we just clowns here making stuff up? What if we actually tried to tell the truth, maybe just turn the spin level from 9 to a 3 and see what happens... as an experiment"
Meanwhile, the NYT website had Trump as the >95% winner a couple hours prior.
Between the Brexit, the Canadian Liberal party sweep, and this election, there is some methodology error in modern polling in the English speaking world that needs to be figured out.
XKCD's "Sports" comic also applies to the media:
Well, if it didn't become apparent when Russell Brand absolutely destroyed "Morning Joe" back in 2013, there's no saving them.
1) All the volatility happened in the after hours. If you just ignored the markets when they were closed, today you are pleasantly surprised, assuming you are the typical long only investor. Don't watch the markets, especially in the after hours.
Heck don't watch them on a day to day basis unless its in your job description. Life is stressful enough that you don't need to watch what your google/amazon/etc RSU's will be worth on a daily basis.
2) There is an order type called stop loss. These were useful in the 90's but haven't really had a good use since about 2005.
They allow a user to "lock in gains" or halt losses by being an order that is triggered if the markets hit a certain level. Essentially the order isn't live until its limit is crossed and then the order becomes valid.
Unfortunately if markets move alot you can get your order hit to close our your position during a momentary drop or flash crash.
Nowadays with market's more likely to have short term volatility stop loss orders aren't really an order type that anyone should use, ever.
The NYSE and Nasdaq are doing away with these orders but alot of regular investors with self directed accounts have been brought up thinking that using a stop loss order is a good idea.
it never is...ever.
http://www.marketwatch.com/story/nyse-joining-nasdaq-in-elim...
Also stop loss order still has lots of value instead of blindly buy-and-hold.
Besides, not watching or worrying about your stocks has benefits on your sanity as well as your wallet.
The lack of gun control legislation prospectively coming from a President Trump, as opposed to HRC's platform of re-enacting the assault weapons ban etc., is driving those stocks lower.
:/
I think the market thinks he's bluffing on the trade wars.
I have a lot of issues with the rhetoric of Donald Trump, and of the Republican Party in general. This is not what I want to have our presidential elections be, and I feel now that the lesson is "Lying constantly, being rude and temperamental and petty, campaigning on vague and meaningless statements that nobody expects you to hold WORKS and can win you elections."
What happens in 2020, when Donald Trump runs for re-election? Is he going to temper his rhetoric and run a more moderate campaign that isn't based on falsehoods and insults, or is he going to double down on what's been established to work?
I feel like the state of political discourse in the country has been severely changed, and I definitely don't think it's for the better.
But if he doesn't care about getting a second term then all bets are off.
The middle class tax cuts? Not sure, their is a deficit to think of. not sure how that would get through congress.
Last night DJIA futures dropped several hundred points, but that didn't translate to the actual stocks today.
I believe the markets wanted stability more than anything else. If he would have mentioned during his speech his desire to prosecute Hillary etc, I think that would have really affected the markets in a very bad way.
Relative to other bonds US treasuries are a lot less attractive today.
http://www.investopedia.com/university/bonds/bonds3.asp
http://data.cnbc.com/quotes/US10Y
But the price is not that simple. Since bonds are paid periodically, the market price factors in the next coupon. Would you buy a bond at the same price 1 day before paying coupon than the day after? Of course not! So market price is called "dirty" because it has the next coupon implicitly considered. There are different ways to make it a "clean" price, depends on the country.
I bought a few with cash on hand in the retirement and college savings accounts.
From Google Finance:
Bonds [yields]
3 Month 0.42% +0.02 (5.00%)
6 Month 0.53% +0.03 (6.00%)
2 Year 0.90% +0.07 (8.43%)
5 Year 1.48% +0.12 (8.82%)
10 Year 2.07% +0.12 (6.15%)
30 Year 2.86% +0.10 (3.62%)The bond market is extraordinarily efficient at pricing risk, and right now, they're beginning to price a significant risk of a long-term US default.
On the other hand he's been protectionist and not afraid to attack trade agreements that benefit large global corporations at the expense of American workers.
Much of that probably depends on what he actually does, but much of that also depends on whether people look at what he actually does instead of what they're told about what he does.
We definitely have to wait and see, and I think that is what really bugs people.
You can argue about who is actually justified for feeling what, but crucially, the only impact it ends up having is to further embed the feelings. In other words, it is not a solution to these problems, it is a cause.
This directly contradicts what he has said he would do [1],[2].
Best case is we are much more involved in Syria/Iraq by this time next year. Worst case? War with Iran? Proxy war with Russia?
Clinton would have been status quo, I give you that for sure.
For Silicon Valley, (and HN by proxy I suppose) Trump immigration policy will be a problem. I think he will prevent/discourage the best and brightest from around the world to come here, work, and bring substantial benefit to our economy (rather than the economy of their homeland).
[1] https://www.youtube.com/watch?v=aWejiXvd-P8 [2] http://www.cnn.com/2016/09/09/politics/donald-trump-iran/
I don't think it does, actually. Right now we're involved in a number of military interventions in a number of countries, and I can not articulate to you at all what our interests are in these interventions, or more accurately, what my interests are in these interventions. Theories about Saudi Arabia and Qatar giving money to the Clinton foundation and getting military services in Syria sound at least reasonable to me on the grounds that I have no other explanation for what the hell is going on in Syria, or how it interests me, a fairly common American voter. As near as I can tell, if we "lost" all of those engagements right now and just went home, perhaps with an apology, my geopolitical position would be improved as a result of that in every way, especially in less tension with Russia and other developing powers.
(Aren't liberals supposed to be in favor of the proposition that the US is nothing special, and the world is becoming more multi-polar, and we ought to peacefully stand down and let the American Hegemony dissolve to some extent? As near as I can tell, all of our actions in the Middle East right now are primarily intended to try to hold on to American Hegemony out there. I don't want it, on almost every level, not least of which is our demonstrated inability to stabilize those countries. History tells us what it would take to do it. We don't want to do it. I don't want to do it. It's time to let American Hegemony in the Middle East go.)
That's why I specified that he's more likely to pull back on the things that are currently going on that hardly anybody even seems to realize we're doing. It was actually amusing to me, in a grimdark sort of way, than ANSWER is already planning to start up its protests again [1], as if they could possibly make it any more obvious that they are simply a anti-(R) organization rather than an anti-war one. If they were really anti-war, they should have bee protesting continuously throughout the entire Obama administration, as big as they ever did (props to those rare few who actually have been), not starting it up the instant an (R) is back in office.
Trump appears to be promising to wave a big stick at things that are actually in American interests; I rather anticipate that faced with the threat of much more focused action, those interests won't actually want direct war. It is also, ultimately, the only sane policy... you must threaten to retaliate when your interests are threatened, the game theory is clear, you can't promise to take a nuke to Boston and then sit back and be considered about the response... even if that is what you actually do. You still have to promise (credibly!) that you're going to retaliate.
I think a lot of people are coming in with the assumption that Trump's foreign policy must necessarily be stupid and brutish, and of course, when you come in with that assumption, you'll find plenty of confirmation bias that it's true. I don't think it is. I think people are also coming in with a lot of false assumptions about our current policy and our current situation, such as the guy I saw on HN yesterday who appears to believe that Obama has actually shut down the war in Iraq and that we are currently at peace. We aren't. We're basically at war right now. Given the number of fronts we've got some sort of fight going on, if the situation we are currently in does end up breaking out into World War III, the start date historians assign for that conflict will probably be in our past, and Obama will get "credit" for being the President at its beginning. Personally, I think that a lot of people have a hard time understanding Trump's foreign policy because it's based on the situation that actually exists right now out there in the world, and you've been kept very carefully unaware of what's actually going on out there, so the resulting proposal looks like gibberish to you. Part of my vote for Trump was actually to avoid World War III, which contrary to the impression most people seem to have, is actually the course we are currently on. The powder keg is already going off. The question is not whether Trump will set it off, but whether he can successfully stop the explosion already in progress. From what I can see, he's taking the steps to do that.
Yes, that even includes making clear declarations that we will defend our interests. That returns predictability to a situation that has become very unpredictable. The Middle East can not be stabilized when the US will decide to knock over your government so that a different government can run a pipeline through your country that you don't want, or whatever other dumbass reason we actually did it for. The Middle East will be stabilized (at least more so) when the US makes a clear declaration that we will only intervene when our direct interests are at stake.
My personal opinion is that the Clinton campaign has done their best to claim that Trump is going to be a madman deploying our military every which way and nuking whomever he chooses precisely to cover up the fact that our current policy is deploying our military every which way for dubious reasons.
If you want a good understanding of the geopolitical actions of the countries of the world, a good place to start is with one of the two books by George Friedman (The Next Decade, and The Next 100 Years). These books give compelling reasons why Russia is doing what it is doing, why we need to work with Iran, and the demographic reasons for turmoil in the middle east.
I think the difference between the candidates was that Hillary understood strategically why we have not done more to help Syria, why ISIS is a minor player, why accord with Iran is important, and why the recent activity by Russia in Syria and Ukraine are both predictable and not incredibly dangerous. I don't think Trump understands any of this, but my guess is that he is getting a crash course in it right now. I hope he can learn. I also hope he's smart enough to keep his emotions in check when and if something important comes up because if he treats the button like he treated his twitter account we are screwed.