• January 8 2017

Trumponomics gets the thumbs down from Nobel-winning economists

• Rich Miller 

A pack of Nobel Prize-winning economists gave Donald Trump and his policy plans the thumbs-down on Friday, with one saying the president-elect's programs could lead to a deep recession.
Speaking on a panel during the first day of the annual American Economic Association meeting in Chicago, the Nobel laureates voiced a variety of concerns about the billionaire developer's stance, from his haranguing of US companies about their outsourcing plans to the risk that his tax and spending proposals could lead to run-away budget deficits.

Trump's plan for the US to spend itself out of trouble just "won't work", says Nobel laureate and globalisation expert Joseph Stiglitz. Photo: Christopher Goodney

"There is a broad consensus that the kind of policies that our president-elect has proposed are among the polices that will not work," said Joseph Stiglitz, summing up the views of the panel that included his fellow Columbia University professor Edmund Phelps and Yale University's Robert Shiller.
Such disapproval though is likely to fall on deaf ears. Trump rode to victory on the back of an unconventional campaign that was short on advice from PhD economists -- relying more on a team of wealthy businessmen -- and there's no indication that's about to change.
He pledges to accelerate growth and create millions of well-paid jobs through spending hikes and tax cuts as well as reduced regulations and renegotiated trade deals.

Discouraging newcomers

Phelps was particularly critical of Trump's singling out of individual companies for abuse and praise, saying such interference could end up discouraging newcomers from entering markets and bringing with them much-needed innovation.
"The Trump government is threatening to drive a silver spike into the heart of the innovation process," he said.
Phelps also voiced concern about Trump's plans for big tax cuts and spending increases. "Such a policy runs the risk it could lead to an explosion of public debt and ultimately cause a serious loss of confidence and a deep recession," he said.
That also has the University of Chicago's Roger Myerson worried. While other presidents have run big budget deficits in the past, they depended on foreign purchases of US debt to do so.

'Confidence and trust'

With Trump threatening to renegotiate US trade agreements and shift to an "America First" policy, the willingness of foreigners to keep buying US government securities can't be taken for granted, Myerson said.
America's interaction with other countries "has to be based on confidence and trust," Stiglitz said. "That's being eroded."
Angus Deaton of Princeton University said he was less worried about the US economy under Trump than he was about international relations, particularly when it comes to China.

The Asian nation was facing difficult economic problems and sounding more bellicose in the region even before Trump won the presidency on a vow to take it on, Deaton said.
Yale's Shiller was the only Nobel Prize winner on the panel discussion who didn't take a shot at Trump. "I'm a natural optimist and I would not like to speculate on how bad it could get," he said. "Maybe one of the other panelists wants to do that."
They certainly did.
Bloomberg

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Source:   http://www.smh.com.au/business/trumponomics-gets-the-thumbs-down-from-nobelwinning-economists-20170106-gtngaq.html

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Vancouver Real Estate Prices

Vancouver home sales down 5.6 per cent last year, prices slide

Real estate prices see a 17.8 per cent slide over same month in 2015

The Canadian Press

January 4, 2017 

A high-angle view of Vancouver’s False Creek real estate as seen from the Fairview Slopes neighbourhood, Vancouver, B.C., February 24, 2016. (Bayne Stanley/CP)

VANCOUVER — Home sales in Metro Vancouver dropped by 5.6 per cent in 2016, the city’s real estate board said Wednesday, wrapping up a tumultuous year in one of the country’s most watched housing markets.

The composite benchmark price for all residential properties in Metro Vancouver, as measured by the Multiple Listing Service home price index, fell to $897,600 in December. That’s a 17.8 per cent slide from the same month the previous year.

“It was an eventful year for real estate in Metro Vancouver,” board president Dan Morrison said in a statement.

“Escalating prices caused by low supply and strong homebuyer demand brought more attention to the market than ever before.”

Residential property sales in the city started the year off strong, sometimes hitting record highs. But partway through the year the market started to cool, with sales and eventually prices declining.

The cooling came as a number of measures were implemented in an effort to address home affordability concerns in Vancouver, including a 15 per cent tax for foreign buyers and a tax on homes left vacant.

“As prices rose in the first half of the year, public debate waged about what was fuelling demand and what should be done to stop it,” Morrison said.

“This led to multiple government interventions into the market. The long-term effects of these actions won’t be fully understood for some time.”

There were 39,943 detached, attached and apartment properties sold in the region last year, down from the 42,326 sales recorded in 2015.

Despite the decline in the number of homes sold, 2016 was the third-highest selling year on record, behind only 2015 and 2005.

Last month, residential property sales totalled 1,714, a 39.4 per cent decrease from the 2,827 homes sold in December 2015.

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Source: http://www.macleans.ca/economy/home-sales-in-vancouver-down-5-6-per-cent-last-year-prices-slide/

 

 

Why Trump's Tough Talk On China May Work

 

  U.S. President-elect Donald Trump speaks during a rally at Ladd-Peebles Stadium in Mobile, Ala. 

                                                                               (AP Photo/Evan Vucci, File)


Investing #​TrumpsAmerica
Dec 19, 2016
Why Trump's Tough Talk On China May Work

Bryan Rich ,
Contributor

As we near year end and near a new administration and policy stance, the geopolitical risks have risen.

I've talked about the China threat quite a bit. China's currency regime was at the core of global economic crisis and is inching us all toward what looks like an ultimate military crisis. The seizure of an American drone by the Chinese on Friday was another step toward that end.

Remember, back in January, I talked about six global market themes that would rule for 2016. Among those, I said "China's currency manipulation will come home to roost.....China's currency manipulation (i.e. keeping their currency weak relative to the rest of the world, to corner the world's export business) was a big contributor to the global credit bubble and subsequent economic crisis.
Only after being persistently pressured by key trading partners (namely the U.S.) have they allowed their currency to slowly appreciate over the past several years. But now their economy is slowing, a dangerous scenario for China.
Meanwhile, China is losing export prowess to Japan, a country that has weakened its currency by almost 35% in the past two years.
The easy fix, in the minds of the Chinese, is to jump start exports. How do they do it? Weaken the currency, which is precisely what they have started doing (beginning in August of last year). But, longer term, expect such a reversal on formerly agreed to concessions by China, to be an act of economic war, which may, over the next decade or two, lead to military war (U.S., Europe, Japan v China, Russia, N. Korea)."

Since January (when I discussed the above), China has continued to weaken its currency. They've blamed it on capital flight.
But with the economy still running at recession speed, they want and need a weaker currency, and they are walking it down. They know what works. A cheap currency drives exports. Exports drive prosperity in China.

But they've run into new leadership in the U.S. that is talking tough and has the credibility to act (unlike the outgoing administration).

That has money in China seeking the exit doors as more bumps appear to be ahead for the economy (not the least of which are threats of tariffs). And with that uptick in money leaving the country, the monetary authorities have clamped down on capital controls, more onerously restricting the movement of money out of China.

A weaker currency, tightening capital controls, and an eroding confidence in doing business in China all reinforces a weaker and weaker economy.
Still, as I've said before, while many think Trump will provoke a military conflict, that's far from a certainty. With the credibility to act, however, Trump's tough talk on China creates leverage.

From that leverage, there may be a path to a mutually beneficial agreement, where the U.S. can win in trade with China, and China can win. But it may get uglier before it gets better.

In the end, growth solves a lot of problems. A hotter growing U.S. economy (driven by reform and fiscal stimulus), will ultimately drive much better growth in the global economy.

And China has a lot to gain from both. Though in a fair trade environment, they won't get as much of the pie as they've gotten over the past two decades. But it has the chance of leading to a more balanced and sustainable economy in China, which would also be a win for everyone.



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Source: http://www.forbes.com/sites/bryanrich/2016/12/19/why-trumps-tough-talk-on-china-may-work/?mkt_tok=eyJpIjoiT1dNeU5qUmhNRFpoTURZeiIsInQiOiJPS1haMjZqdnUyRm9KTUw0Z0tOM1NcL0hKd2VUUGVqQmt2NnBBdzV4dWFvdVFzN2RQd1dFNmlCTTNGbnc5bjloenJ6aXlKZTZvdWE3UG50d1NkZkV5YUdGelAwSmsxNVo0TGMxTmxWOFRaZ0FjeSt6U0FcLzdzNHgyUkZGUStKdytqIn0%3D#4287e4ecb777


China's stay at home currency policies may do more to bring down Vancouver, Canada real estate prices than the 15% owner tax lmposed by the provincial governments... governments get involved too late and increase volatility when trying to reverse trends, infrastructure spending to create well-paying, longterm employment could fuel inflation and highlight Canada's skill shortages.... 

Quotes

"Our busy minds are forever jumping to conclusions, manufacturing signs that aren't there." #Epictetus  

"Your Speed doesn't matter, forward is forward."

Bromide can be poor advice? sense of urgency needed in a fast moving world...etc.

a trite and unoriginal idea or remark, typically intended to soothe or placate.

"feel-good bromides create the illusion of problem solving"

Jon Sindreu ‏@jonsindreu

Central Banks Loosening Their Grip on Markets? http://www.wsj.com/articles/central-banks-loosening-their-grip-on-markets-1483364681 …

 Consistently investigate what gives other people energy. Be the fan that fuels it.

- Darren Rowse

 

Clothes + Manners do not make the man; but when he is made, they greatly improve his appearance. Arthur Ashe

#quote

Grande Prairie's winter sunshine http://bit.ly/2ignxyn 

 

 

A Journey Of A Thousand Miles Must Begin With A Single Step.

Brevity is the soul of wit. #Hamlet #Shakespeare @jbot

Thou seest we aren't alone unhappy This Wide and Universal Theatre Presents more woeful pageants than the scene Wherein we play in #Shakespeare

"There are always flowers 4 those who want to see them." Matisse

"Our busy minds are forever jumping to conclusions, manufacturing signs that aren't there." #Epictetus

7 'black swan' events that could upend oil,commodity prices this year

Here are 7 'black swan' events that could upend oil, commodity prices this year, Barclays says

Tae Kim | @firstadopter

3 Hours AgoCNBC.com

 

 

PENGGG | Getty Images

 

Barclays' commodities research team shared its top risks for oil, gas and metals investors this year including events such as trade wars, sovereign debt defaults and a Tesla battery breakthrough.

"From Brexit to Trump's election, polling models and analysts were frequently surprised in 2016 by political events that had seemed remote," analyst Michael Cohen wrote in the Thursday report titled "The black swans of 2017."

Nassim Taleb wrote "The Black Swan" in 2007 that focused on the risks of unforeseen tail events.

"We define a commodity 'black swan' as an extreme event or dynamic that market participants, including ourselves, are not currently pricing in. We assess several black swan threats to the supply, demand and transit of commodities that could potentially move markets in 2017," 
Cohen added.

He said global political populism and trade protectionist policies are key risks to the commodity supply chain this year.

Here are seven "possible black swan events" from Barclays and the firm's predictions for commodities prices.




Link: http://www.cnbc.com/2017/01/05/here-are-7-black-swan-events-that-could-upend-oil-commodity-prices.html?__source=newsletter%7Ceveningbrief

Aristotle Quotes

Happiness is the meaning and the purpose of life, the whole aim and end of human existence.

  

 

Happiness is the settling of the soul into its most appropriate spot.

All men by nature desire knowledge.

You ought not to fear that over which you have no control.

The pleasures arising from thinking and learning will make us think and learn all the more.

 

Dignity does not consist in possessing honors, but in deserving them.

 

No great genius has ever existed without some touch of madness.

 

Quality is not an act, it is a habit.

 

Excellence is never an accident. It is always the result of high intention, sincere effort, and intelligent execution.

 

   Aristotle ‏@AristtleQuotes

 

 

Failure gives success its flavor

 

Failure is the condiment that gives #success its flavor. ~Truman Capote 

 #quotes #inspiration

 

 

 

 

 

Warren

  

Quotes on Keeping it simple

“You were made and set here to give voice to this, your own astonishment.” 

— Annie Dillard

"A life that is vowed to simplicity, appropriate boldness, good humor, gratitude, unstinting work and play, and lots of walking brings us close to the actually existing world and its wholeness."
— Gary Snyder

“But why shouldn't my work be hard? Almost everybody's work is hard. One is distracted by this notion that there is such a thing as inspiration, that it comes fast and easy. And some people are graced by that style. I'm not. So I have to work as hard as any stiff, to come up with my payload.”

— Leonard Cohen

“By believing passionately in something that still does not exist, we create it. The nonexistent is whatever we have not sufficiently desired.”

— Franz Kafka

Mathematical Concepts Investors Should Know

Photographer: by James Leynse/Corbis

Odd Lots: These Are the Mathematical Concepts Investors Should Know

Victor Haghani on the pros and cons of quantitative finance.

by

Tracy Alloway

December 11, 2016, 9:42 PM PST

Subscribe to the Bloomberg Odd Lots podcast (Pocket Casts) 
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Every week, hosts Joe Weisenthal and Tracy Alloway take you on a not-so-random walk through hot topics in markets, finance, and economics.

The most important market news of the day.

 

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What's the optimum amount of money you should bet on a particular outcome? The answer is dictated by mathematics, yet plenty of people still go against the laws of numbers and probabilities when it comes to investing their money.

This week we speak with Victor Haghani, CEO of Elm Partners Management LLC and the co-founder of the collapsed hedge fund Long-Term Capital Management LP, about the most important mathematical concepts for investing. We also discuss the pros and cons of quantitatively-led finance.

Link: https://www.bloomberg.com/news/articles/2016-12-12/odd-lots-these-are-the-mathematical-concepts-investors-should-know