Now that the drama of the election is finally drawing to a close, the reality of what happens next is the big topic in the bars, coffee shops and TV studios across America.
Politics
This week we got a clearer look at what Trump’s second term may look like.
As the President-elect starts the long process of the transfer of power, even his Republican colleagues are wondering about some of his nominations for top positions in his administration. It was widely expected that he would look to his friends, supporters and financial backers to fill these positions but even those who weren’t perturbed by that idea have baulked at some of the names being put forward.
The one who everyone knew about was billionaire Elon Musk. He has been given a roving role alongside former Presidential hopeful Vivek Ramaswamy to run something called the Department of Government Efficiency – or DoGE for the entertainment of crypto-loving Musk – with a mandate to shave trillions of dollars from the Federal budget – which means, slashing federal jobs, schools, social security, healthcare and defence. Their first move has been to demand a five-day return to the office for all Federal employees to prompt mass resignations which they say: ‘they welcome’.
But in the last week, Trump has added some even more colourful names to the team sheet. His choice for Defence Secretary is a questionably-tattooed news reader from his favourite TV channel rather than a decorated five-star general. His choice for Secretary for Health and Human Services is Bobby Kennedy Jr, a son of the famed political dynasty but an anti-vaxxer with a dubious record on public health initiatives. With a history of drug use, he has been accused of trading on his family name but aligning with hard-right, Cypto-dealing podcasters to spread misinformation, conspiracy theories and the new currency of politics – fear.
And as if that wasn’t weird enough for the governance of the nation’s wellbeing, Trump has added Dr Memhet Oz to the list to oversee Medicare and MedicAid the two health programmes hundreds of millions of working, retired, and lower income families rely on for health coverage.
Memhet is known to Americans as Dr. Oz – a fixture on the sofa for the Oprah Winfrey Show, and then as a TV daytime chat show host who takes calls from Americans with interesting and colourful medical conditions. Oz has also been widely criticized for putting his name to products of questionable medical quality and being the Chief Medical Officer for Chinese medical software company Neusoft. He has alsobeen accused of peddling ‘quackery’ and giving a platform to untested alternative solutions, faith healers, psychics and backing spurious claims that apple juice is high in arsenic and cellphones cause breast cancer.
And while Trump’s interest in having seemingly unqualified celebrities in positions of power is questionable, the character of people like Florida Representative Matt Gaetz as Attorney General are causing greater concern. Gaetz is under review by Senate after earlier Department of Justice investigations into allegations of sex trafficking of an underage girl, sex with a minor, drug-fuelled orgies and sharing inappropriate material through Congress.
And while it is unclear whether Senate will approve this or other Trump nominees as the Constitution requires, there is a work around for the incoming President – recess confirmations.
This loophole allows a President-elect to skip the approval of Senate and put his man or woman into the post without the approval of Congress.
Significant appointees in Treasury, Business, Foreign Affairs and Diplomacy are still to come but it is interesting to see that Trump, the ultimate outsider, is picking a team low on expertise and high on fame and fortune instead. Is politics finally dead?
Business
Watching the manoeuvres and announcements coming out of Trump’s Mar-a-Largo compound are the Wall Street traders and many influencers who shape our investment portfolios and pension funds. It was widely expected that Trump will be a good thing for stocks and the markets because he is largely pro-business and a fan of light regulation, conditions businesses and their backers prefer. But the next President has also indicated he is inclined to use policy – fiscal, tax, tariffs, immigration – to shape the global business environment more than perhaps many expected. And with his nominations likely to enact the President’s wishes unquestioningly rather than play the scrutiny role of ‘the adults in the room’ which many analysts had hoped for, there are some jitters.
The US market is still riding that initial wave of enthusiasm for Trump’s victory, the magnificent 7 tech shares which have driven the 30%+ gains so far this year are still adding value. But while the bulls are in the ascendency and, as witnessed on my trip to New York last week, gilet-wearing finance bros are ordering pints of Laurent Perrier Rose while scoping lofts and apartments in expectation of bumper bonuses and YouTube-fuelled crypto hawkers are back, the rest of America is watching on much more nervously.
There is lots of uncertainty about future economic projections. The deficit and national debt are back in focus as the nation’s talking point, when or if we’ve reached the market top is worrying fund holders, and what would a meddlesome Trump administration with talk of tariffs and mass labour supply disruption through deportation mean. There is also concern that if the administration decides to sell gold and use Bitcoin as a reserve it brings into question what the future for the dollar looks like – a shift the BRICS economies and those who hate America are keen to push.
After two years of solid growth, more bearish voices are saying it feels like the good times for the market might be drawing to a close – the end of what Keynes called the Animal Spirits, the irrational human beliefs which drive financial decision-making in volatile times. Many retires, or those like me close to my pipe and slipper days, are talking about selling up, taking our gains and shifting the funds into money markets which are still paying a relatively handsome 5% coupon with none of the downside risk – we can all remember the sound of previous bubbles bursting.
My financial advisor always tells me it is ‘time in the market not timing the market’ which matters, but as analysts often remind us, while stocks go up on the escalator they descend on the elevator.
So, it is when, not if, that dramatic plunge occurs which is seems to be today’s big question.
And finally, last night saw the CMA – Country Music Awards – take place in Nashville.
The music industry’s stars – at least those who wear boots, hats and rhinestones – turned out to see hosts Luke Bryan and NFL star Peyton Manning anoint Morgan Wallen as Entertainer of The Year, Chris Stapleton’s ‘White Horse’ win single of the year, and plenty of tributes paid to lifetime achievement winner George Strait – recognised as the granddaddy of neotrad country while much of the scene was being swayed by Taylor Swift inspired country/pop cross over.
In another nod to the returning traditions of America, African American superstar Beyonce was once again shunned by the CMA. Having previously received a frosty reception when she performed with the Dixie Chicks at the CMA’s in 2016, this year she received zero nominations despite her smash hit single Texas Hold’Em and album Cowboy Carter being top of the country charts for weeks and weeks and outselling anything else by a country mile.
