From today’s Morning Briefing:

This week may be dominated by the fallout from the failure of the Republicans to repeal and replace (R&R) Obamacare (a.k.a. the Affordable Care Act, or ACA) at the end of last week. The good news is that it didn’t take very long to cripple this flawed legislative initiative, which means that the Trump administration can move forward with tax reform much sooner than had been widely expected. The bad news is that the perception, right or wrong, is that the new administration has been greatly weakened by the implosion of their ACA-R&R initiative. It’s too soon to be sure of that. It’s also too soon to be sure that Obamacare won’t implode, as Trump has often claimed it would. If it does so, then he will be in a better position to repeal and replace it at that point.

For now, the so-called “Trump bump” in the financial markets may be turning into a “Trump slump.” Putting it all together: The Trump slump is replacing the Trump bump because Trump is having trouble draining the swamp. Joe and I are sticking with our assumption that a combination of deregulation and tax cuts will significantly boost S&P 500 earnings this year and next year. We still expect that tax cuts will happen this year, on a retroactive basis. If they don’t take effect until next year, however, we won’t know that until this summer, at which point the effective date won’t matter much to stocks: Either way would be just as bullish since investors by then will be focusing increasingly on 2018 anyway.

Debbie and I believe that the surge in animal spirits, as evidenced by all the soft-data economic surveys, is driven mostly by the perception that the new administration is very pro-business and anti-regulators. That hasn’t changed notwithstanding the failure of ACA-R&R. High hopes for significant tax reform might suffer a slump, but that’s not inevitable. If Obamacare remains the law of the land and succeeds, then Trump can say “no harm, no foul.” If it fails, he can say “I told you so.” Of course, Trump is still in a position to tweak the ACA with executive and regulatory actions that could either save it from a death spiral or speed up its demise.


A Brief Summary of what the AHCA might or might not have accomplished

by Laura Ehrenberg-Chesler on March 27, 2017 in Healthcare

I have been struggling with understanding what the failed health care bill did,and did not include. I found this very brief summary from Jim Geraghty at “The National Review” very useful: “Like most of my colleagues, I found AHCA pretty “meh” at best. (With all the bashing going on right now, it’s worth remembering that […]

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Paul Ryan and the new Health Care Bill

by Laura Ehrenberg-Chesler on March 23, 2017 in Healthcare

An interesting excerpt from Paul Ryan’s Opinion piece in today’s “WSJ”: “Right now, the tax code discriminates against people who don’t get health care from their jobs. It makes no sense that those who have insurance through work see a tax benefit, while those who don’t, get nothing. Our bill would level the playing field […]

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Repeal and Replace

by Marilou Long on March 15, 2017 in Healthcare

With the media focused on yesterday’s CBO release of the scoring on the proposed Republican health care plan, I found this analysis from today’s Yardeni Research Morning Briefing interesting: The bull obviously got recharged by the animal spirits unleashed following Election Day. Undoubtedly, investors got into the spirit as well on expectations that Trump’s Electoral […]

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Entrepreneurial Capitalism vs Crony Capitalism

by Laura Ehrenberg-Chesler on March 9, 2017 in capitalism

From our favorite economist Ed Yardeni: “My experience as the owner of a small business is that entrepreneurs are actually driven by insecurity, not selfishness. Our number one worry is that we won’t satisfy our customers so they will go elsewhere, putting us out of business. That’s why we strive so hard to grow our […]

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How knowledge of U.S. history can help Preserve our Republic

by Laura Ehrenberg-Chesler on March 2, 2017 in politics

From “The National Review”: “Regardless of whether a proper understanding of history and government is essential to one’s vocation, it is absolutely essential to the future of our republic. A citizenry that fails to learn about or appreciate its cultural and political inheritance is far more likely to squander that inheritance. The American Founders drew […]

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Dow Crosses 21000

by Marilou Long on March 1, 2017 in equity market

The Dow Jones Industrial Index crossed 21000 for the first time this morning.  From the linked WSJ article: The Dow Jones Industrial Average surged above 21000 for the first time, as investors embraced optimism from President Donald Trump and Federal Reserve officials. The blue-chip index climbed 195 points, or 0.9%, to 21007 shortly after the […]

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New Eurozone Debt Crisis?

by Laura Ehrenberg-Chesler on February 15, 2017 in Bonds

From Stratfor Geopolitical research: “As they look at the turbulence ahead in 2017, European policymakers are watching the eurozone’s bond market with concern. A selloff in government bonds, following the trend worldwide, is adding stress to its already vulnerable economies, especially in Southern Europe. Officials’ concerns are magnified by the uneven pace of the eurozone […]

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Flying Cars!

by Marilou Long on February 9, 2017 in lifestyle

Ed Yardeni had an interesting piece this morning about autonomous, or self-driving cars, and then things really got crazy!  Uber is looking at developing flying cars.  From Dr. Yardeni: (4) Auto pilot. If autonomous cars aren’t enough to blow your mind, consider flying cars. Uber Technologies recently hired Mark Moore to become director of engineering […]

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Ed Yardeni’s take on Trump’s “Protectionism” and Global Growth

by Laura Ehrenberg-Chesler on February 7, 2017 in Foreign Markets

“Trump’s protectionist sentiments and pledge to renegotiate trade agreements on a bilateral, rather than a multilateral, basis is the immediate uncertainty confronting America’s biggest trade partners, i.e., all those countries that have enjoyed a wide open market for their exports in the US. They won’t have much choice but to negotiate the best deal they […]

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