The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

“Smartest” Expectations

11/18/2016

The “Smartest People on Wall Street” were also surprised by the Trump election but have recovered enough to issue ten themes or expectations that might inform your investing decisions:

  1. “Expected returns: Only slightly higher.”  (Probably!)
  2. “US fiscal policy: A pro-growth agenda.”  (Only in the short-term  . . )
  3. “US trade policy: Concerns are likely overdone.” (Probably!)
  4. “EM risk: ‘Trump tantrum’ is temporary.”  (EM = Emerging Markets)
  5. “Trump and trade: Hedge with RMB.”  (RMB = Chinese currency)
  6. “Monetary policy: Focusing the toolkit on credit creation.”  (Leading a horse to water . . .)
  7. “Corporate revenue growth recession: Signs of inflection.”  (Signs of ending already.)
  8. “Inflation: Moving higher across DM.”  (DM = Developed Markets, like U.S.)
  9. “The next credit cycle: Kinder and gentler.”  (Thanks to Dodd-Frank?)
  10. “The ‘Yellen Call’ 2.0: Now with contingent knock-in.”  (Only if inflation surges.)
Now that you know what Goldman Sachs thinks, what do you think and why?  
Now, what will you do with that information?

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