The Flinchum File
Thoughtful Economic Analysis and Existential Opinions

The Morning After . . .


I confess to believing that Clinton would win the election.  So did Wall Street!  The bloody aftermath today proves that.  Readers will remember that I predicted, in the unlikely event of a Trump win,  an immediate 500 point drop in the Dow, followed by a Brexit-like recovery in a week or two.  I still believe that the stock market will recover from this in a relatively short period of time.

One can look at the election as a loss by Clinton.  However, I see it as a loss of gridlock.  There is a chance that Trump will actually be able to do something, which Obama could not do for the last six years.  As an old infantry officer who learned that the failure to command was the worst thing that can happen when you come under fire, I am delighted to see gridlock die.  Whether you approve of the direction of the change that is coming, it will be refreshing to simply be moving again.

The lordly investment giant of Goldman Sachs said this morning that “broadly speaking, our fundamental economic outlook is unchanged.”  Long-term, I agree . . . but it could get choppy, even scary, in the short-term.

They also said “we think the chances of the Fed raising rates in December have diminished.”  Unfortunately, I have to agree.

Continuing, “we see near-term pressure on the dollar versus core markets and downward pressure on Treasury yields.”  I doubt this!

“Heavy fiscal stimulus may support growth and inflation, and benefit targeted infrastructure sectors, but may face considerable opposition from Republicans.”  There will be a genuine battle between the Austrian wing of the Republican Party and the Supply-side wing of the Republican Party.

“Trump’s proposed tax cuts may support growth.”  Watch the $20 TRILLION national debt skyrocket, at least in the short term!

If your candidate won, celebrate modestly.  If your candidate lost, celebrate being an American.  But, know that this too will pass .. ..

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