Tag Archives: Davos

All Systems Go for the Economy and Davos

The Economy: All systems are go on a global economy that shows signs of continuing to expand. Easy money from central banks remains the order of the day. Trump tax cuts and deregulation have bolstered business confidence. The holidays showed Americans on a spending spree. Naysayers see the band on the Titanic bravely playing as she went down. Optimists see hundreds of billions in repatriated US corporate profits, tight labor markets, inflation and Trumponomics as the next leg up in the economy and the 9-year bull market in stocks. Ray Dalio of Bridgewater has called this a new bear market in bonds as Jerome Powell was confirmed by the Senate as the new Fed Chair. Powell is seen as dovish and a continuation of the Bernanke/Yellen school of gradualism in monetary policy. But it pays to remember that markets tend to drive the Fed and not the other way around. Interest rates are rising. Gold has broken through its $1,300 resistance and oil is at multi-year highs. With global expansion, investors are complacent that central banks will keep stock markets and real estate moving up forever.

Food for Thought: Davos, billed as the Global Economic Summit is in full swing. Over time it has morphed into another rich kid’s confab with the glamorous and notorious. It is known as the Bastion of The Globalists. This year Donald Trump will upset the apple cart as he presents America First Shock and Awe with his appearance and speech on Friday. The annual ego rush of whose private jet is bigger will be sadly missing Prince Alwaleed’s private 747 with the gold throne. The Prince is apparently still confined by his King who reportedly wants billions in return for a kiss-and-make-up return to business as usual.

Music of The Week: Chaka Khan “Chaka”

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The Eve of the Inauguration

The Economy: The U.S. economic numbers continue to indicate that things are picking up bigly. Housing starts are up. The Philly Fed Manufacturing Index is up. Jobless claims are near their lows. Earnings season is in full swing but the economic data this week is overshadowed by the inauguration. Davos, the annual financial confab was held this week. The group, which is noted for its strong support of globalization, is trying to adjust to the new reality in Washington. Team Trump was notably absent. The message is consistent whether it be to the Davos Elite, the State Department, the Intelligence Community, the Press or any of the other sacred cows of the past 100-years: “Your days of self-aggrandizement are over.”

Food for Thought: On the eve of the inauguration, it feels like Y2K on New Year’s Eve 1999. Even the weather is the same with drenching rains that flooded parties. Half the U.S. is apparently convinced that this is the second coming. Half that it’s Armageddon. It’ll be something in between. One thing is for sure, for the first time in decades, hard-nosed business men and women will be running the U.S. government with military men in charge at the Department of Defense. We expect change to come hard and fast.

Music of the Week: Sade “Promise”