Seasonal volatility

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But first, calm down ladies, these dream boats are probably taken.

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Seasonal Volatility

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I think I have isolated the pattern. Anything good that has happened since the election is due to Hair Club and the economic “renaissance” he will usher in.

Anything bad is just noise or seasonal volatility or whatever.

In this case, they are probably right that this is noise.  There are large swings of the seasonal factors this time of year, which means that marginal swings in the timing of actual seasonal influences can introduce a lot of volatility.  But this is a hopefully-sensible interpretation, not a known known.

What we do know is that the Trump bull market, starting from a point where the total return to SPX had already quadrupled, is FATED to roll on.

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Bloomberg stenographers have a whole story transcribing Jamie Dimon’s take on the Trump Administration.  Unlike the last Administration, this guy is not anti-business, and it seems like businessmen will finally get a voice, according to Dimon. It is about time, I say! We so seldom here the views of a fellow like Jamie Dimon.  I expressed this idea last night, quite directly,  but I figured I would go for a more G rated presentation this AM.

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The “news” story on Dimon is an embarrassment of riches, quite literally, but I thought these quotes in particular were top drawer.

  • On fixing Detroit: I would do it for moral reasons alone. But it is good business.  I wonder if JPM shareholders would agree that morality trumps business. Something about property rights and maybe the law.
  • On American exceptionalism: This is the only nation on the planet that was an idea. It was a vision. It was a value. The only value appearing in the original constitution was 3/5. But I know what he means; his applause line just happens to be dead wrong.  England, for example, was an idea, one that survived repeated conquest, as Robert Tombs recently explained to me. In fact, America was an English idea, with a little Montesquieu thrown in. *
  • On being Treasury Secretary:  I love what I do. I’m not ready to do something else. I think I add a lot of value to America just doing what I’m doing. 
  • On himself: I’m a patriot.
  • On education: A school is not going to happen if businesses don’t work with schools about what kind of jobs they really need. Not a typo.
  • On regulation: JPMorgan didn’t jeopardize the system. We did not cause the crisis. We have three times more capital than we had back then. That seems true, about JPM itself not causing the crisis.  But the question of capital is about how much you had then, not now. Why do you have more capital now? Did something cause this presumably good thing? I don’t know if JPM actually have enough capital now, but these guys are skeptical. Of course, they are not businessmen, so obviously they are just haters who could not possibly know.
  • On corporate taxes: Because of that, companies are leaving their money overseas. They’re reinvesting it overseas. They’re buying companies overseas. And some of that’s permanent. It’s not coming back. Really? American companies investing in -100% return projects overseas must be part of some charity effort. I guess it must be moral reasons, which apparently would be fine.
  • On his $27mm comp: I live and breathe JPMorgan Chase. I wear this jersey, “It’s not about my comp.” I really mean it. Well, given that he really means this part, it must be true.

We can only hope that under the new Administration voices from the business community will be given a proper hearing, given how important these voices are, and not be quashed like they have been in the past.

Just as a friendly reminder, the last two Administrations that loudly prided themselves on business experience were those of Hoover and Bush Junior, the “MBA president.” Remember that? He started and ended his meetings on time, unlike windy Bubba.

Reagan’s economic results were mediocre, although career-mostly-public-servant Paul Volcker credits Reagan with backing him up on his disinflation effort, which I think is important.  But even Reagan prided himself on endorsing freedom, not business. The DoD was a government run operation.

Moynihan somewhat less pukey

I thought the interview with BoA president Brian Moynihan was much better.  (The video is on Bloomberg’s front page, for now.)  Moynihan strongly implied that Trump is a good result, which I found disappointing. But he stuck to business issues and did not wrap himself in the flag or say he does it all for America.

I had two favorite parts. First, when he corrects the interviewer for calling him sort of a macro economist really.  No, I am a macro risk manager. Would not want to seem to be an economist, which makes sense.

Second, the way he both bragged about the strength of BoA’s research department AND said that their forecasts for 2017 were probably wrong at the same time was really impressive. This guy is smooth.  I worry only that he might not love America enough.  I think one of the reasons he stays as CEO of BAC might be partly because the job pays well. He doesn’t do it pro bono, like Jamie does or at least would if it came to it, which it won’t.

* Canada was also founded on an idea. The people who lost the American revolution figured it would be a good idea to team up with the people who lost the French and Indian War to create a country mostly huddled within 50 miles of the American border. They were later joined by people who lost to Cromwell.  It mostly worked out. Incidentally, Tombs’ history is an awesome resource. It covers the entire history of England, from Arthurian legend to the beginning of the first world war,  and then continues for a couple hundred more pages.