The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

“Smartest” Expectations


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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