Wall Street’s big short: President Donald J. Trump

“Add the juggernaut that is Donald J. Trump to the list of what-ifs that is worrying Wall Street,” Gertrude Chavez-Dreyfuss and David Randall report for Reuters. “A growing realization that the unpredictable New York real estate developer is in a position to win the Republican nomination and then battle Hillary Clinton for the White House in November’s election has caused some investors to sell U.S. stocks. They fear having such a wild-card president could trigger trade wars, hurt the economy and add a lot of market volatility.”

“Trump’s statements on business and Wall Street don’t neatly fit into one ideological worldview, but if anything, they are seen as isolationist in a globally connected world. He can also suddenly pick on businesses over various issues, such as his call for a boycott of Apple Inc’s products after the tech giant refused to help the FBI unlock the iPhone used by one of the San Bernardino shooters,” Chavez-Dreyfuss and Randall report. “‘The election this year is the height of uncertainty,’ said Phil Orlando, a senior portfolio manager and chief equity strategist at Federated Investors in New York, which manages $351 billion. He said political concerns – personified by Trump’s emergence as a frontrunner – are one of the main reasons why he began reducing equity exposure in mid-January.”

“Trump’s rhetoric mixes populist criticism of immigration policy, Wall Street behavior, and other countries’ trade policies, while also citing support for business-friendly efforts such as lower taxation. The lack of detail from Trump about his policies and how he would implement them is a particular worry for investors,” Chavez-Dreyfuss and Randall report. “The real estate investor proposes labeling China a currency manipulator and ending what he calls China’s illegal export subsidies and theft of U.S. intellectual property. He also wants to penalize companies who move jobs from the U.S. to Mexico by hitting them with high tariffs if they want to export back to the U.S., as well as build a wall at the Mexican border to prevent the flow of illegal immigrants.”

“Trump’s plans include ideas that traditionally come from Republican candidates, such as lowering the corporate tax rate, simplifying the tax code, and as his web site puts it, cutting the deficit through ‘eliminating waste, fraud and abuse’ and ‘growing the economy to increase tax revenues,'” Chavez-Dreyfuss and Randall report. “‘I think markets will like Trump on the taxes issue since he favors lower rates and a permanent change in repatriation rules,’ said David Kotok, chairman and chief investment officer at Cumberland Advisors in Sarasota, Florida, which manages $2 billion in assets.”

“Still, financial advisers say that Trump’s plans to do away with the so-called carried interest tax loophole – which gives hedge fund and private equity managers preferential tax treatment on much of their income – would prompt more selling if he begins to climb in national polls against Clinton,” Chavez-Dreyfuss and Randall report. “Jeffrey Gundlach, the co-founder and CEO of bond investing and trading powerhouse DoubleLine Capital, said that Trump has a history of being ”comfortable with a lot of debt and leverage,” and that won’t impede him from spending heavily. He said he believes Trump’s pledge to spend heavily on the military makes defense stocks a good investment play.”

Much more in the full article here.

MacDailyNews Take: As always, Wall Street hates uncertainty.

Prediction: Apple will cave to U.S. government demand to crack open iPhone, Donald Trump will get the credit – February 20, 2016
Donald Trump calls for Apple boycott over San Bernardino terrorist iPhone encryption – February 19, 2016
‘Who do they think they are?’ Donald Trump blasts Apple for not unlocking San Bernardino terrorist’s iPhone – February 17, 2016
How Apple can comply with Donald Trump’s ‘Made in America’ directive – January 21, 2016
Why Donald Trump is now targeting Apple and their ‘damn computers’ – January 19, 2016
Trump could cost U.S. consumers $6 billion per year by imposing a 35% tariff on Apple iPhone – January 19, 2016
Trump: We’ll get Apple to manufacture ‘their damn computers and things’ in the U.S.A. – January 18, 2016
Robots, not people, led Apple to make new Mac Pro in the U.S.A. – January 21, 2014
Debt-free Apple to take on debt to avoid huge U.S. repatriation tax hit – April 26, 2013


  1. Idiocarcy.

    Republikkkans are such obstructionists and it is very telling that they will fall on their sword and endorse Trump despite all the shit they said about hime and despite the fact that he goes against everything they stand for.

    Goodbye GOP.

    1. Oh so principled and vengeance obsessed the GOP whores, that they’ll do anything and back anyone at all, regardless of National or Worldly repercussions.

      Shame on the selfish GOP!

  2. Not endorsing Trump (since I have no idea what his positions on certain important issues actually are), but it’s interesting that if you look at history, they (the media, the establishment) said the same type of things about Reagan:

    “He’s not serious.” “He’s a B-movie actor.” “He can never win.” “He’ll never beat Carter.” “He’s too extreme.” “His ideas are too simplistic.” “He’ll be dangerous in dangerous times.” “He was a Democrat before he was a Republican.” “He’s a divorcee. They’ll never elect him.”

    1. Reagen at least had a long history in elected politics. While I disagreed with him ideologically, he also had a positive manner to him. Trump`s volatile rhetoric appeals to only the basest of people`s instincts. He`s also a huckster.

      1. While I do not support Trump, I will say this about him in the comparison with Reagan: Trump has a very sharp mind, whereas Reagan’s mind unfortunately was failing at the stage of life at which he became president. I remember many times when he would stumble and bumble at a question, it was painful to watch. He was great with scripted lines, but he clearly had some issues with age and the mind even when president. Of course after his presidency he unfortunately developed Alzheimers.

        I bring this up because it was very worrisome to have a president whose mind was showing some deterioration due to age.

        So Trump clearly is more mentally sharp and intelligent than Reagan was when he ran for president, by a country mile.

      2. I don’t think anyone knows what Trump really believes, perhaps including Trump. He says one thing one day, then the opposite the other. By ignoring the totality of what he says, those who follow him can cherry-pick today’s quote to tell themselves he agrees with them. Of course, that means ignoring that he disagreed with them on the same issue the previous day. Tomorrow, who knows?
        He gives empty platitudes and boasts that don’t actually mean anything.
        He’s the consummate con artist, and it seems like there’s a good chunk of the country (maybe 30-50%, hopefully not more) that will probably vote for him, right after they’ve sent their credit card details to that nice African prince who emailed them asking for their help in exchange for a million dollar reward.

  3. If you Americans continue to allow more Clown Factories to exist, then you’re going to get more like Trump. Good luck to you all if he’s President. Can’t somebody somewhere educate the voters for populist policies that he’s a bad apple – and bad for Apple too.

    1. See First 2014, Then 2016’s post above.

      I was alive when Reagan first ran and what you’ve just typed was said by countless scared Europeans (depending on the U.S. to protect them from the USSR) and others around the world in the runup to the election.

      History seems to be repeating itself.

      1. The difference is that Reagan had a (mostly) successful stint as governor of California, and wasn’t a blank slate. He also wasn’t a thin-skinned narcissistic with delusions of her personal omnipotence.

  4. I’m gonna go out on a limb here..and say..I bet Donald doesn’t sell off all the property/land he currently owns in Dubi, despite his public comments about the Middle East and people of a certain faith..

  5. The “carried interest” loophole is a travesty of justice and complete tax fraud. It never should have been allowed by the IRS and Congress in the first place. It should be shut down immediately. It is absurd to give Wall Street favorable “investment” tax rates when everyone else earning a living in the country must pay ordinary income tax rates on their salaries and wages. This is how a lot of people on Wall Street get rich, folks. They basically do not pay the say tax rates that you and I pay. Nothing fair about it.

    Earnings by professional investors should be taxed as “ordinary income” since, to them, these are the equivalent of their wages. They should pay their fair share of taxes just like everyone else in the country who draws a salary or earns a wage.

    More importantly, most of what passes for “investment income” on Wall Street is not an investment at all as defined by economists. Most of what Wall Street earns is simply trading profits. To economists, an investment is something that creates capital (eg, a manufacturing plant). Secondary trading on company shares and bonds is not, technically, investment. So there is no rational reason for profits on this type of trading activity to be granted favorable tax treatment as if it were a true investment.

    Rage against the machine !

  6. Love watching those socialists Cronkite and Rather having to “analyze” the beginning of the Reagan Revolution.

    The leftist media bias was there even then: “[Reagan] convinced people he was presidential, WHETHER IT WAS JUSTIFIED OR UNJUSTIFIED.”

    The media was much more dangerous then, with only a few points to control, the leftists had near total control of the national narrative.

    1. I’d like to suggest that it is this type of binary thinking that is destroying America and the world. Everything is left/right, socialist/fascist, us/them, etc.

      I am not saying that there are no absolute truths. I believe there are. However, I do believe that most political and social issues are complex and require analysis, thought and some humility and compassion. It is so much easier to label and stop listening. It doesn’t mean we all have to agree, but we should hold onto our humanity as we work through the problems we face together.

      1. Binary thinking isn’t what’s destroying America, it’s a totalitarian mindset that wants to control everyone through the government. I’m not going to work together with people who want to flood our country with 3rd-world immigrants who vote 80% Democrat and are easily manipulated and will never become Americans even if they gain citizenship.

        Trump is the one candidate who has made stopping the immigration flood a priority. If someone is trying to break into your house and your neighbor is helping them you don’t go outside and try to “work through the problems” together. You fight them with everything you have.

    1. I would take statements like that seriously, had there not been so many people who said they would leave if President Obama is reelected, or if President Bush was reelected before that. Everyone who says such things end up staying anyway, as far as I can tell.

      Not like you can really get away from USA President, who pretty much rules the rest of the world too, but with less restrictions and oversight, than he runs the USA.

      Then again, those other presidential candidates never tacitly accepted endorsement from a Ku Klux Klan leader, or kept a book of Hitler’s collected speeches, My New Order, by their bed side. With a guy like that in the White House, there’s no telling what will happen, and we should be prepared for anything.

  7. Small visioned man for a small visioned country. If there was a presidential candidate that was proposing a wall around the entire nation to keep the citizens of that nation in, then the whole free and civilized world, not just Mexico would be lining up to pay for it.

    At any rate it’s going to be the Dump Trump or someone that is Hillarious and that probably means that the Guantanamo on the Bay Resort will stay open and there will be a new war. After all it’s the main export of that nation and that’s what the article pointed out.

    “He [Jeffrey Gundlach] said he believes Trump’s pledge to spend heavily on the military makes defense stocks a good investment play.”

  8. First, off it seems that there are always articles about how Wall Street hates uncertainty. I’ve read them for several decades now.

    Well, guess what: Life is uncertainty. Get over it. Look back at history and find me a time of total stability.

    And Wall Street analysts will always find uncertainty in everything. It’s what they do. And every election year we get articles about how Wall Street hates the uncertainty of the elections; perhaps they’d prefer a nice stable dictatorship?

    We’d all love guarantees in life but that’s not going to happen. As to Trump, I won’t comment in this post about him, but trust me, if it were not Trump, then Wall Street analysts would find something else to worry about. Look at how they find stuff to worry about with Apple, in spite of record earnings and profits.

  9. they should be scared. tRump is a Hoover-like figure who would trigger trade wars like in the 1930’s when the Smoot-Hawley Tariffs made worse the Great Depression.

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