Trump's hour and a half interview with the Washington Post left the mainstream press stunned.
He said the US is headed for a “very massive recession” and “it’s a terrible time right now” to invest in the stock market.
This was an unprecedented claim for a major party front-runner.
Trump also said his claim would not affect the stock market -- I thought it would.
I waited to see, and Trump was right.
Trump's best quality is too often his worst quality too: He tells you what he thinks, and it appears he doesn't censor himself to meet left-wing speech (politically correct) standards.
Unfortunately for Trump, he's attacked so many fellow Republicans, and the Party itself, that too many Republicans will not vote for him.
It was Trump's job to make Republicans and the Party look good, while convincing people he was the best Republican choice.
If he could made a majority of Republicans think he was the best choice for the nomination, Trump still needed the votes of Republicans who preferred another candidates in November (perhaps choosing one of them as his Vice President to win a specific state, as John Kennedy did when he picked Lyndon Johnson to win Texas).
You can expect all Democrats to campaign against Wall Street -- you don't expect that from any Republican:
“I know the Wall Street people probably better than anybody knows them,” said Trump … “I don’t need them.”
I think the probability of a recession in 2016 is much higher than it has been since the last recession ended, but only a 50% probability now, in my opinion.
4Q 2015 Real GDP growth was slow, and 1Q 2016 growth is expected to be near-zero.
Two weak quarters in a row are enough to reach a 50% probability, in my opinion, especially when stock market averages have barely changed from their 2014 highs.
Important weekly economic indicators, such as new claims for unemployment insurance, are NOT in an uptrend, which I need to see before I say a recession is coming soon.
A "very massive recession" is an interesting claim for me to investigate, and I was already considering the possibility (The May - June 2016 EL newsletter, which will be published in early May, will have this feature article: "Black Swans: ZIRP, NIRP and the QE Bubble".)
Central banks around the world are crushing savers / retirees who can't find safe investments with yields above the inflation rate.
Central banks are propping up stock and bond markets … which mainly benefits the top 10% who own most of the stocks and bonds.
Wall Street never predicts a recession, or a bear market. In 2007 the subprime mortgage problem was said to be 'well contained' … until it wasn't.
In summary:
(1) One Democrat candidate for President hates Wall Street, and avoids their campaign contributions, which at least is consistent.
(2) The leading Democrat candidate made millions giving speeches to Wall Street, and takes their contributions.
(3) The leading Republican candidate predicts a massive recession, and doesn't take any contributions, so must not care about Wall Street.
(4) The other Republican candidate doesn't say much about Wall Street, but his wife used to work for a Wall Street firm, and he takes their contributions.
It seems Sanders and Trump have more in common on this subject than they do with the other candidate in their own party!
If a Democrat is elected:
You can expect not one welfare program or agency will be eliminated, or slimmed down. There will be much more Federal spending on education, Medicare, agriculture, and alternative energy subsidies. This will be paid for with a record amount of government borrowing (debt).
Sorry, the last paragraph was a trick paragraph:
I just described the years 2001 through 2006, when Republican George W. Bush was President, and Republicans controlled Congress !
Both parties stand for more government, and more government results in less prosperity. Both parties stand for more wars, and more wars result in less prosperity. We don't even win the wars.
That's why I'm a libertarian.
