Issues, News and Views

Who will be the
2016 candidates
for President of
the United States?



Donald Trump has come out
of nowhere and stolen the
show. He seems to have
captured the zeitgeist, the
spirit of the times. Can it last?

Who, from among this
strong, diverse field , will
emerge victorious to return
the GOP to the White

With the inept Obama
Administration in its final
days, one would have
expected that experienced
governors with a record
of accomplishment would
dominate the Race 2 Replace
but outsiders and novices
Trump, Carson and Fiorina
are in the hunt! Seasoned
executives for sure, but
not the ones the beltway
had in mind!



The creaky, rusty Clinton
machine grinds slowly
onward, wayward, relying
solely on muscle memory
for movement. Will
Democrats suddenly rise
from their slumber to the
realization she cannot win a
General Election?

Is Hillary a foregone
conclusion, or will
someone else swoop in and
steal the show?

Folks on the right can barely
contain their joy at the
prospect of a Clinton
candidacy. Shouldn't that
give pause to the Democrats?
Biden and Warren are both
better candidates and better
Democrats than Clinton, but
aren't even in the race. And
then there are O'Malley and
Sanders, again, both better
Democrats and better
candidates. Yet the Dems
seem intent on following
Clinton in a lemming-like
charge over the cliff.


2017/01/09 - Herewith we provide Chalprem’s semi-annual economic update. Over the last several updates, in an environment of sluggish growth, we have continued to reject recession talk, instead projecting more of the same continued sluggish growth. Our projections have been consistently vindicated, but we can now happily project that prospects are looking up for an accelerating American economy.

For the past eight years the US economy has been the subject of a radical leftist experiment frequently referred to as Obamanomics. The Federal Reserve has kept interest rates near zero, which translates as the most accommodative monetary policy in our nation’s history. The Federal Government has spent nearly $10 trillion more than it has taken in, translating into the most accommodative - and indeed, irresponsible - fiscal policy in our nation’s history.

Yet we have endured one of the slowest economic expansions in our nation’s history. How can that be? It’s because we’ve also had the most constrictive, asphyxiating regulatory policy in our nation’s history.

The lesson here is that Big Government just doesn’t work. We’ve doubled our national debt, borrowed ten trillion dollars from the likes of Communist China, with nothing to show for it. If we had only spent the money incentivizing people to do constructive things like, say, building bridges or bicycle trails, those expenditures would at least have some benefit to show for the cost; but instead the money was poured down the regulatory toilet whose express purpose is to prevent people from doing constructive things like, say, building bridges or bicycle trails.

With the sun setting on Obama’s Reign of Error we look forward with optimism to the Trump Administration that lies ahead. In our August feature we explored the Trump economic plan - that we might call “Trumponomics” - and we were extremely pleased with the content, a welcome repudiation of the past eight years. Trumponomics represents a disposal of Obamanomics and a return to time-tested ideas that have been proven to work: small government, low taxes, deregulation, and free markets.

So to put it simply, no, there will not be a recession any time soon. Obamanomics mutated into a bottleneck that held back economic activity. The American economic pipeline has become clogged with red tape, much like Europe’s. So much economic activity that should have happened, hasn’t, or at least hasn’t yet. So many jobs not yet created, so much income not yet distributed to workers, dividends not paid to pensioners and retirees. So much prosperity waiting to happen, eager to happen, waiting for someone to unclog the economy, as so many Americans continue to suffer economic hardship.

But help is on the way. As the red tape gets cleared from the pipe we can expect economic activity to flow more smoothly and rapidly, bringing improving incomes to tens of millions of Americans.

The prospects for increasing economic dynamism are being reflected in the stock market as investors ponder the improving environment and reevaluate their models. Is Trumponomics merely a jazzed up Obamanomics 2.0, an incrementally less-worse version of the current Obamanomics 1.0? Kind of like a Microsoft upgrade? Or are we moving to a new Trumponomics world that is both profoundly different from, and much better than, Obamanomics by a full order of magnitude?

Time will tell whether Trumponomics comes to define a public policy package that is a marginally less-worse sibling of Obamanomics, or an entirely different, much better economic approach. If it’s the latter, and it may well be, the stock market will keep finding its way up, but, we caution, never without the occasional correction. But if Trumponomics is a new, different, and better world, then stay invested, my friend. And view any pullback as a buying opportunity.

In the past we have pointed out that rising energy prices are at the core of almost every economic downturn the United States experiences. That includes 2008/2009, but would possibly exclude the 2001/2002 downturn which was heavily influenced by the combined impact of the dot-com debacle, and the 9/11 terror attacks.

Thanks to fracking the United States has achieved the ability to produce all the oil it needs, at economically viable prices probably below $60/bbl. At that price everyone should make some money, and some participants a whole lot more. The structure of US oil supply and demand appears to be insulated from global supply shocks, and we should expect prices to settle in the mid $50’s for the next few years. We can expect occasional dips triggered by OPEC quota-cheating, but OPEC has no power to push prices above $60/bbl.

There do not appear to be in the short term any threats that could spike domestic energy prices. And recent reports indicate that the Strategic Petroleum Reserve is at capacity, providing a further short term cushion. And in the middle term we expect supply circumstances to improve further as cabinet nominees Rick Perry (Energy) and Scott Pruitt (EPA) can be expected to be very helpful in ensuring a consistent and reliable domestic energy supply chain – exploration, development, extraction, processing, distribution.

Copper prices have risen significantly of late. This time last year we were looking at prices of approximately $2.00/lb, and by July they had recovered to $2.20/lb. A price surge developed during the fourth quarter, preceding the Trump election but not at all hindered by it. Prices topped $2.75 during December, but settled at $2.54 on Friday. USD commodity prices ought to fall if the dollar goes up; but what we are seeing is price increases in the face of dollar strength, indicating even better circumstances in the commodity space.

If copper prices provide some indication of improving global economic health, than so does global shipping. The Baltic Dry Index, which measures rates for global bulk shipping for commodities as varied as soybeans and iron ore, rose steadily from the 600’s in July to the 900’s now, with a spike in November to over 1200. Rising shipping rates indicate improvements in global shipping and trade activity.

The Shanghai Composite seems to have stabilized, although how much is the result of direct intervention by the ChiComms is uncertain. After its run to 5000 in 2015 and subsequent crash below 3000 a year ago, the market finally seems to have established a firm footing. The 3000 level formed a ceiling during the first half of this year, with several attempts to break above it that failed to hold. But in the second half, 3000 has developed as a floor, with rapid recoveries from several breaches.

The Yuan continued its slide against the dollar, as did most other currencies. The CNY quickly moved through the 6.70’s and 6.80’s in November, and nearly broke 7.00 before Christmas. On Friday it closed at 6.91, but a move above 7.00 seems inevitable after Chinese New Year. Similar story for the Euro, sliding from 1.11 to 1.05 since the election, with a move south of 1.00 probable by summer. Sterling has its own unique set of issues, but it is currently near all-time lows of about 1.21 that it previously set in October.

So the sum of our economic expectations for the next six months are as follows:

  • Slow but gradually accelerating economic strength reflected in GDP, employment, incomes, and profits;
  • A rising stock market, occasionally expressing through “corrections”, either frustration with Democrats’ gridlocking, or concern over continued dollar strength;
  • Slowly rising, but still very low, interest rates and inflation; and
  • The black swan still lurking just beyond the horizon is massive and rapidly growing global government debt, but especially ours and China's. It is unclear how it will be impacted by Trumponomics.

All in all, pretty good. A lot of cause for optimism. Could be way worse. Happy New Year!


December 23, 2016 - Unfortunately it appears that Obama has chosen to leave gracelessly.

Parting ways with decades of bipartisan support for Israel, Obama sucker-punched the only democracy in the mideast by not vetoeing an anti-Israel UN resolution pushed by her totalitarian adversaries.

Republicans and conservatives have come to expect these cheap shots, so it is no surprise to see Obama take action against Israel while allowing Syria to cross his red lines.
With this move one almost wonders whether Obama is green-lighting the candidacy of the Israel-hating Rep. Keith Ellison (D-MN) to take over the DNC, signalling that it is open season for Democrats against Israel.

Looks like the Grinch stole Hanukkah...


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