Bob's Blog

Reflecting on President Trump

11 Nov 2016

I, and no doubt the rest of the world, have now had more than 24 hours to digest what is perhaps the biggest political shock to have happened in our lifetimes.

The thought of ‘President Trump’ 12 months ago seemed even more far-fetched than the UK voting to leave the EU but here we are with both things having happened and a new political and world order about to be unleashed.

There will no doubt be many millions of column inches reflecting on how we have got to this place but to my mind you can certainly see the similarities between Brexit and Trump’s victory.

Both appear to be an anti-establishment vote predicated on an appeal to ‘take back control’ or ‘make America great again’.

They are reactions to a narrative which suggested that it has been the elites who have benefited at the expense of the ‘ordinary man or woman’ in the street.

Trump was convincing in his suggestion that he could turn this around.

Certainly in his case – let’s not forget him being a ‘billionaire’ businessman – his victory was won as a perceived ‘outsider’ versus the Washington ‘establishment’.

A man with no political experience who has uttered some of the most extreme views ever heard on the hustings; who comes with a huge degree of controversial baggage having targeted many minorities and has still triumphed against the perceived political ‘insider’ that was Hillary Clinton.

The fact that the numbers of those who voted for him are a relatively small majority of the overall numbers eligible to vote will perhaps make it even more galling for Democrat voters – especially when you consider that Clinton polled more votes across the entire country!

Trump tapped into the anti-establishment ‘vibe’ that is sweeping the Western world and it will be interesting to see if this continues to be played out in both the French and German elections this year and whether the UK’s EU exit is not the last we see throughout the course of the decade.

The big question now of course is what happens next?

Will Trump follow through on his electioneering rhetoric or will we see a more measured approach?

His victory speech was certainly far more conciliatory than we have heard before.

Plus the fact he will have some political heavyweights around him – Giuliani and Gingrich to name just two – plus a Senate and House of Representatives (who I suspect will not be too compliant) gives cause for hope.

Will that wall get built?

Will he ban Muslims from entering the country?

Will he ride roughshod over the constitution?

I doubt it.

However Barack Obama must be thinking that some of his key policies, perhaps most notably Obamacare, are not going to last too long into a Trump term.

Overall, as with the post-EU referendum mode, I suspect the spectrum of dire consequences will not be as real or as damaging as many have predicted.

The financial markets – always a sign of whether we should be truly fearful or not – appear to have taken the news relatively well.

Big falls have already been offset and at the time of writing gains have been made.

The idea appears to be that Trump’s trade focus will be positive for both the UK and the US – certainly the idea we will be at the back of the queue when it comes to a trade deal seems much less likely.

Time will clearly show us the potential positives that the UK might see.

From a housing and mortgage market perspective I suspect there will be little impact.

London estate agents may be feeling cock-a-hoop at the thought of more money working its way into the super-prime market but outside of this it’s not likely to cause great change.

Perhaps inflation may not rise as quickly as previously thought and therefore increases to rates may be further away. Ultimately our market’s influencers will come from within rather than outside these shores.

My own perception is that, short-term at least, surprise (and panic) will be followed – indeed we may already be in this period – by a swift recovery and a new normal.

The more medium to long-term impact of a Trump Presidency will of course depend on what he does, and quite frankly it’s very difficult to predict what his priorities will be and how the Republican majorities in Congress will react.

At this point it’s fair to say that being in a position of not knowing what comes next might be preferable to actually knowing.

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