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Trumps new budget for 2021


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Have just read Trump's proposed 2021 proposed budget. Is it me, or is it imaginative (as in fiction), or probable, as in cut cut spend, cut, cut, spend on my friends? Either way it is more political wish list than likely scenario, I fear. I refer , of course to the principle assumption; the US economy will continue to grow at a steady heady 3% well into the decade. Assuming everything continues on as it has done....... I have been waiting for a market correction for the past 6 months, based on experience of the cyclical nature of markets. I have been proved incorrect and have experienced some financial pain sticking to said premise (called the Dow @28350).  However, assuming there will be no change to the ever expanding nature of the US economy brings me back to my first financial teacher, who's mantra is "assume nothing".  Life has a tendency to kick one in the most personals when one least expects it and expecting the  US economy to relentlessly kick-on at 3% is great expectation indeed.  Or am I somehow wrong again? If China can robotically grow GDP @7-8% pa then why not the US @ 3%? But  China is having a nasty surprise with the arrival of the Coronavirus. Naturally, US will not be affected much.....See, the problem with assumptions....

Just the same, I am sure many of the Presidents fans and backers view the proposed budget as great facts waiting to happen. And not the comic it may look like to others. Twixt the two reality maybe? Or ne'er the twain shall meet?

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  • 3 weeks later...

My My, what a difference in 18 days.... Dow has tanked currently 24945. All because of a factor not included in most calculations, the F factor or the random event not usually considered. In this case Coronavirus, which President Trump insists will miraculously go away in the spring. Either he knows something we don't (probably) or he is optimistic in the extreme.  In it's 7th straight negative trading day it would appear the markets feel differently. Looks like interest rates are about to come down again. Commodities are being savaged, especially oil and gasoline. As for equity.... retracing back to levels July 2019, chasing December 2018  base levels of 22000 where it may stop. So far we have seen a correction(necessary in my view) of the melt up of  Jan-Feb 2020.  It is not a time for panic, but a time to wait , watch and take the new opportunities.  Have just traded out of my position on the DOW for a face saving profit. Hero to zero and back to hero again... had to endure a winter of humiliation on account of it. But stuck to my guns and gut instinct (backed up with cyclical data) and feel relief. 

 

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