President Donald Trump

NEW YORK, NY - AUGUST 29:  American business magnate and TV personality Donald Trump visits "FOX and Friends" at FOX Studios on August 29, 2011 in New York City.  (Photo by Slaven Vlasic/Getty Images) NEW YORK, NY - AUGUST 29: American business magnate and TV personality Donald Trump visits "FOX and Friends" at FOX Studios on August 29, 2011 in New York City. (Photo by Slaven Vlasic/Getty Images)

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This has certainly been an interesting election period. As a long time Republican even I am amazed that the House, Senate and White House are now in Republicans hands.

The popular vote is very telling: as of 1:47 pm  pacific time Wednesday November 9, 2016

Clinton:  59,787,604

Trump: 59,581,587

Compare those numbers to the 2012 election:

President Obama 65,915,795 

Mitt Romney 60,933,504

Democrats, especially the left wing of the party, were never really in love with Clinton and that probably did cost her the election.

With all that said… the future!

We are still one country and all Americans. Some people who read my work assumed I was a Democrat because like some democrats I fought against economic bears who predicted that a great American recession was imminent.  But my opinion was based on my work as a data miner not on unfounded ideology.

Politics and presidents  play a minor role in my economic thinking. Readers may have noticed that in the last 3 years I rarely wrote anything on President Obama. I stick to economics.  Demographics, and inflation are more powerful informers of the economy than the Fed or any sitting president.   Maybe that notion will give some solace to those who are disappointed with the current election results.

A lot of my left leaning friends asked if I am bearish now on the US economy, this day after the election.  Nothing has changed in my thinking except  I think we might finally get a major infrastructure bill and we probably won’t raise taxes to pay for it.  So, domestic investment could be better in the next 2 years. As we can see below, domestic investment has been light recently.

From Doug Short
https://www.advisorperspectives.com/dshort/updates/2016/10/28/visualizing-gdp-an-inside-look-at-the-q3-advance-estimate

gross-domestic-investment

And we can see from that data below that public construction spending has been light compared to residential and non residential construction spending.

From Calculated Risk:
http://www.calculatedriskblog.com/2016/11/construction-spending-declined-in.html
public-spending-logan

I love a massive infrastructure plan, and I am not afraid of the federal debt here in America. Our Country GDP and Net Assert wealth is over 125 Trillion dollars.  We are the only economic super power left in the world and we have the U.S. dollar.

But,  I don’t expect  any infrastructure plan  to have super major multiplier impact. It will be a positive for sure but not this panacea of growth as some have forecast. This is a repair package that will draw workers from existing crews. We have a labor shortage in construction right now, so the ability for the government to find new workers is limited.

The unemployed are largely high school drop outs, high school educated only, drug addicts and those coming out of jail, so employing these potential workers should be a priority of any plan. Be mindful that as all mature countries of size have limits to what a infrastructure package can do. This isn’t like building a massive amount of homes, cars, streets, commercial building for a growing labor force that didn’t have any before. Still with that said, with house, senate and White House all on the same side  of the isle, this is a deal that can happen  in the short term.

The 10 year has taken off today.  We are at 2.06% as I write this. With the prospect of an infrastructure package, the market for copper and lumber are probably going to play long.  Until 10 year breaks over 3.04%, I still believe in my long term channel of 1.60% – 3.04% being the range for some time.  Inflation is rising in the U.S. but is nowhere close to being a major concern.

With regards to the effect of the change in the political regime on regulations, I don’t feel that I can make any meaningful predictions, other than I would imagine the banks are going to benefit on anything that President Trump can accomplish.

On the Affordable Care Act, who knows what will happen there and the free college plan for those families making less than 125,000 is probably dead. A lot ideas and plans are still up in the air. However, stick to economic cycle data readings such as leading economic indicators and unemployment claims to get a big macro perspective of what is going on in the cycle. A lot of  noise out there but math, facts and data still matter.

America is great, was great and will be great. We have solid demographics compared to the  rest of the world.  We have over 100 trillion dollars in financial assets, over 155 million, working men and women,  the biggest military in the world, friendly neighbors, and two oceans as borders.  We are going to be fine.

Granted, this election was ugly.  What I saw on social media during this election,  not just from the pathetic cowardly trolls who hide behind fake names, but from non-affiliated people, was disgusting.

We can’t, as adults, treat other people this way. I can always forgive young people for their lack of integrity as they’re learning to become adults. However, both the left and right resorted to crass verbal abuse during this election and we have to  be better than that and set a better example for our children.

Speak like your kids and parents are watching.

America will be fine.  I, for one, don’t believe that Trump  will act like Hitler or do anything  that the fascist movement of Germany did.  The inherent strength of our system and our people will prevent that from ever happening.

We are still Americas and we always will be!  Have faith in our country and our people even if you don’t agree with their politics.

Logan Mohtashami is a senior loan officer at AMC Lending Group,  which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data  daily on his own facebook page https://www.facebook.com/Logan.Mohtashami