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Global Markets, Initially Shaken, Edge Higher After Trump Victory (nytimes.com)
75 points by samsolomon on Nov 9, 2016 | hide | past | favorite | 77 comments



Was watching NBC news last night (for entertainment, I added them to the "fun stations" list along with "Fox"). And it was funny how they were baffled and backpedaling hard on why Trump won, and they never expected it.

However, one thing that seemed to make them happy was the stock markets. "Oh look, stocks are crashing worldwide" and they kept belaboring that point, as a validation in a way "see we warned you how bad Trump was" kind of sentiment.

For example US Steel (X) jumped a whopping 20% since yesterday. Something tells me they probably won't be focusing on that.

One wonders, does anyone there look around and say "What have we become? Are we just clowns here making stuff up? What if we actually tried to tell the truth, maybe just turn the spin level from 9 to a 3 and see what happens... as an experiment"


CNN was hilarious. King and Blizter kept looking at one county in WI, saying 'just wait'. You could tell they were not really mad as obvious HRC supporters, but just completely shell shocked on what they witnessed. By the end, they kept going back to that county looking for magical votes to appear I guess.

Meanwhile, the NYT website had Trump as the >95% winner a couple hours prior.


How King didn't tell Blitzer to shut up is beyond me. King would be trying to drill down to something interesting, and Blitzer would jump in with "Show me Alabama!".


The NYT site seemed to hone in on results pretty quickly and accurate overall. Pretty impressive work!


Funny how yesterday there were posters here accusing the NYT model as pro Hillary biased. What could they do better if the polls were simply wrong? Their election day forecast model was pretty impressive - it detected the swing early in the evening.


Yeah, it was a depressing read for Hillary supporters. I was hoping their models were wrong but they were pretty much dead on almost everywhere. It swung a lot in some places like Florida, but it got Wisconsin right pretty early on. From a geek perspective it was definitely interesting to track.


Bad polling data is a more likely culprit for the confusion. There's some cognitive dissonance involved when the months of poll numbers and projections turn out to be completely wrong.

Between the Brexit, the Canadian Liberal party sweep, and this election, there is some methodology error in modern polling in the English speaking world that needs to be figured out.


I think people have simply started lying to polls because any opinion you may hold will get you labeled the boogie man word of the day.


The real issue is the change in the phone system. Pollsters used to just dial a random number in the telephone book. Now most numbers are unlisted, and most people won't answer the phone to strangers (or the people that do answer are rather unrepresentative, at least.) All polling methods require getting a random sample of the voting population to be accurate. That's super hard, perhaps impossible.


I enjoy being polled. I find the questions they ask fascinating, especially the push polls, where they ask you your preference, say something stupid about a candidate, and then ask you if that changed your opinion (more or less).


>One wonders, does anyone there look around and say "What have we become? Are we just clowns here making stuff up? What if we actually tried to tell the truth, maybe just turn the spin level from 9 to a 3 and see what happens... as an experiment"

XKCD's "Sports" comic also applies to the media:

https://xkcd.com/904/


Not the same. The narrative they push suits them.


> One wonders, does anyone there look around and say "What have we become? Are we just clowns here making stuff up?"

Well, if it didn't become apparent when Russell Brand absolutely destroyed "Morning Joe" back in 2013, there's no saving them.

https://youtu.be/mDCtFTyw6fI


Which is probably what led to The Trews

https://en.wikipedia.org/wiki/The_Trews_(web_series)


Magnificent, he was playing at a whole other level. I can see the twisted parallel.


What's sad is we just experienced that with Brexit http://www.cnbc.com/2016/08/23/brexit-two-months-on-markets-...


I personally don't think the events can be compared. Brexit has a lot of (unknown) implications for the UK, due to the fact that it's not clear what deal they'll get from the EU. On the other had Trump being elected president is just a change of the president of the US. There's no immediate threat.


I was also amused watching NBC (and CNN) last night. They were so desperate to keep the hope alive, constantly saying "It's not over yet! It's not over yet, too close to call", when it was obvious it was already over.


Don't think it was so much desperate as you don't want to make an early call on the presidency without being sure. They acknowledged that they didn't really see a path, but wanted to get specific info in (like absentee ballot numbers) first before making the official call. Some states still haven't been calling half a day later.


I'm not sure when you were watching. Chuck Todd started saying that there was only the slimmest of hopes for a Clinton victory before 8 pm PST.


Two points come to mind here, wrt the markets.

1) All the volatility happened in the after hours. If you just ignored the markets when they were closed, today you are pleasantly surprised, assuming you are the typical long only investor. Don't watch the markets, especially in the after hours.

Heck don't watch them on a day to day basis unless its in your job description. Life is stressful enough that you don't need to watch what your google/amazon/etc RSU's will be worth on a daily basis.

2) There is an order type called stop loss. These were useful in the 90's but haven't really had a good use since about 2005.

They allow a user to "lock in gains" or halt losses by being an order that is triggered if the markets hit a certain level. Essentially the order isn't live until its limit is crossed and then the order becomes valid.

Unfortunately if markets move alot you can get your order hit to close our your position during a momentary drop or flash crash.

Nowadays with market's more likely to have short term volatility stop loss orders aren't really an order type that anyone should use, ever.

The NYSE and Nasdaq are doing away with these orders but alot of regular investors with self directed accounts have been brought up thinking that using a stop loss order is a good idea.

it never is...ever.

http://www.marketwatch.com/story/nyse-joining-nasdaq-in-elim...


Re #1, but that was all "real" market activity, right? Was it mainly that overseas traders were just a lot more pessimistic?


It's real, but volume is typically much much lower so it tends to exaggerate in either direction. I stopped trading futures at night because lower volumes messed up my strategies.


The volume on S&P and DJIA futures surely is sufficient to be legit?


The only part that wasn't real was the fact that the futures hit the limit-down circuit breakers, which means the market wasn't totally free. Otherwise, yeah. That's real money. A bunch of people overreacted and sold SPX 6% lower than where it closed the next day. Potentially they were hedging derivatives, but either way, frantically selling in a sliding market is not a position you want to be in.


Couldn't they be replaced with some sort of time-weighted system. Sell at 10% down only if it's been 3 hours or more...otherwise sell at 20% down. Something like that


But then you won't get out before the next sucker...


People were watching index futures rather than A/H trading.

Also stop loss order still has lots of value instead of blindly buy-and-hold.


Blindly buy and hold has actually been a pretty good investment strategy for the last few decades.

Besides, not watching or worrying about your stocks has benefits on your sanity as well as your wallet.


It's not all positive. Gun makers Smith Wesson [SWHC, -16.13%] and Sturm Ruger [RGR, -14.44%] down massively on the day as Trump supporters won't be rushing out to take arms against a Democrat government they refuse to recognize.



Gun control is great for gun sales - California for instance is seeing an unprecedented boom in the run-up to their legislation kicking in on Jan 1.

The lack of gun control legislation prospectively coming from a President Trump, as opposed to HRC's platform of re-enacting the assault weapons ban etc., is driving those stocks lower.


On the plus side, CCA (private prison company) is up 50% today.


Yay.

:/


The guy is a speculator first of all so the market understands him very well and he understands the market. He is not going to do anything stupid as he knows there will be immediate negative consequences. He is actually in a hard position now to deliver middle class America it's jobs without generating some short term pain first. Yeah block China and watch that toilet paper cost climb 2-3x and see how adorable things are now middle America. Yes kick out illegal workers and watch those tomatoes go for 10$ per pound. Its all bs fellas and it's bad for You.


But I was promised the crash would teach Trump voters a lesson!


Let's see how his trade wars versus his massive tax holidays play out.

I think the market thinks he's bluffing on the trade wars.


He's had so many contradictory positions and has so clearly made up certain positions solely to manipulate voters that no one really knows how he'll govern.


Didn't stop him from getting elected.


Right. I don't think Americans are upset because he's President so much as we're upset because we found out 60 million citizens of our country are people who in general would vote for an absolutely disgusting person who campaigned on transparent, trivially disproven lies and racist demagoguery.


This is what really bums me out.

I have a lot of issues with the rhetoric of Donald Trump, and of the Republican Party in general. This is not what I want to have our presidential elections be, and I feel now that the lesson is "Lying constantly, being rude and temperamental and petty, campaigning on vague and meaningless statements that nobody expects you to hold WORKS and can win you elections."

What happens in 2020, when Donald Trump runs for re-election? Is he going to temper his rhetoric and run a more moderate campaign that isn't based on falsehoods and insults, or is he going to double down on what's been established to work?

I feel like the state of political discourse in the country has been severely changed, and I definitely don't think it's for the better.


I fear this lesson will now dominate an entire generation of politicians.


It might honestly come down to whether he wants to be elected to a second term. If he does he'll have to keep riding this populist wave somehow, and it'll either be through actual policy changes or somehow continuing to bullshit them with rhetoric.

But if he doesn't care about getting a second term then all bets are off.


He'll pass the massive tax cuts for the rich. It's a common business practice to cut out the middle man. Why pay for a politician when it's cheaper to just buy an election.

The middle class tax cuts? Not sure, their is a deficit to think of. not sure how that would get through congress.


It's a republican congress. They'll fall in line, or Trump will just Tweet "Representative John Doe doesn't support my TAX CUTS! SAD!" and end another career.


Or that the Republicans won't support his plans for changing trade deals


Yep, if Trump talks about his prepared trade war with China, e.g. raising tariff by 45%, of cause there is going to be a crash. Looking at the market hanging on betting Trump won't do what he says is really funny.


DJIA 18,502.47 ▲ 169.73 (0.93%)

Last night DJIA futures dropped several hundred points, but that didn't translate to the actual stocks today.


They started paring losses almost immediately as he was making his victory speech, which was refreshingly magnanimous.

I believe the markets wanted stability more than anything else. If he would have mentioned during his speech his desire to prosecute Hillary etc, I think that would have really affected the markets in a very bad way.


But to write off his rhetoric and uncertainty on the artifical stock market, phony QE-driven economy, auditing the fed, protectionism, etc. on the way to new all-time highs? Perplexing.


It's so silly that people still assign intent to stock market movements. Stocks go up when gamblers/speculators/investors think they will go up and down when they think they will go down. Didn't we learn anything from fucking yesterday when the markets indicated a clear victory for Clinton?


No discussion about what's going on with treasuries today?


Could you expand for those not in the know?


There is a selloff so the price is lower. Bonds pay an interest (in coupons). There is the face value (par). But you don't buy/sell bonds at face value, you buy them at market value. So what's interesting is the yield = coupon amount / market price (or just price).

Relative to other bonds US treasuries are a lot less attractive today.

http://www.investopedia.com/university/bonds/bonds3.asp

http://data.cnbc.com/quotes/US10Y

But the price is not that simple. Since bonds are paid periodically, the market price factors in the next coupon. Would you buy a bond at the same price 1 day before paying coupon than the day after? Of course not! So market price is called "dirty" because it has the next coupon implicitly considered. There are different ways to make it a "clean" price, depends on the country.


There was a relatively large upward movement in yields today (and corresponding downward movement in price).

I bought a few with cash on hand in the retirement and college savings accounts.

From Google Finance:

  Bonds [yields]
  3 Month	0.42%	+0.02 (5.00%)
  6 Month	0.53%	+0.03 (6.00%)
  2 Year	0.90%	+0.07 (8.43%)
  5 Year	1.48%	+0.12 (8.82%)
  10 Year	2.07%	+0.12 (6.15%)
  30 Year	2.86%	+0.10 (3.62%)


This is actually much more indicative of the economic direction the market thinks we will be headed in. Hint: it's not good.

The bond market is extraordinarily efficient at pricing risk, and right now, they're beginning to price a significant risk of a long-term US default.


So buyers of these things think interest rates will be lower in the future (eg due to poor economy and further stimulus perhaps?)


Yes, or at least as insurance in case interest do go lower.


The markets proved smart. In contrast to brexit, it seems they had a better hunch than the pollsters. Also, it seems Brexit is still more uncertainty to the markets than Trump.


Betting markets did not prove themselves however. Just like with Brexit, they were in line with the polls and only reverse at the last minute: https://i.imgur.com/tEDdMpT.png (from https://electionbettingodds.com/WIN_chart_maxim_lott_john_st...)


I'm happy to report i bet early on trump and reaped the rewards!


Yea I understand that Trump is volatile and has talked about repealing Trade pacts, but he's still a billionaire republican that economically came of age in 1980s NYC. You'd think Wall Street would love him from that description.


The Wall Street "elite" I think have mixed feelings toward him. On the one had he's against taxes and has vowed to remove some of the "worst" ones (estate tax, repatriation, etc).

On the other hand he's been protectionist and not afraid to attack trade agreements that benefit large global corporations at the expense of American workers.


I've been wondering if, once the hot blood of electoral politics simmers down, HN will develop a more "nuanced" view of Trump. I absolutely agree that there are things the HN gestalt won't like about Trump, like protectionism and closing the borders, so acclamation is not on the table, but on the other hand, there are also absolutely things the HN gestalt will like such as opposition to TPP, and probably having a significantly higher chance of getting the Feds out of marijuana enforcement than you would have seen under Clinton. I also think there's a much greater chance that Trump will pull back on the military interventions that it seems like many people don't even realize we're currently participating in. (We actually have a lot of military "actions" going on right now.)

Much of that probably depends on what he actually does, but much of that also depends on whether people look at what he actually does instead of what they're told about what he does.


I've been having this exact conversation today. I didn't want either of them, but now that we have Trump what does that mean. The world is not going to end, and he is not taking away voting rights from women (legit comment on my FB feed this morning). But what will he actually do. If you look across the few things he has said not all GOP types of things, and some align much closer with a Sanders agenda.

We definitely have to wait and see, and I think that is what really bugs people.


No, what bugs me is the racism, the misogyny, the intolerance, the anti-immigrant rhetoric, and most of all that he rejects data that doesn't fit his views.


Does the racism today against white people bother you? It's a genuine question, because the vehemence is cranked pretty high, but racism against white people is often automatically excused, so I'm curious where you fall.


No it does not, perhaps because I don't see it as a genuine threat to my position in life. I don't excuse it, but hatred of any kind is only productive to the extent that it generates action, so I see it more as a waste of energy.


Can you give me an example?


A comment I posted earlier today details one, from 538

https://news.ycombinator.com/item?id=12915950


Trump has expressed all of those characteristics. Labeling him and his supporters by proxy may be a stretch, but it's not racism. Call a spade a spade.


Whether you think it's a big deal or not isn't really the point - after all, do you not believe that, a person who expresses some racist belief, even a true one, about (for instance) a Mexican person feels just as justified in the belief?

You can argue about who is actually justified for feeling what, but crucially, the only impact it ends up having is to further embed the feelings. In other words, it is not a solution to these problems, it is a cause.


> Trump will pull back on the military interventions that it seems like many people don't even realize we're currently participating in.

This directly contradicts what he has said he would do [1],[2].

Best case is we are much more involved in Syria/Iraq by this time next year. Worst case? War with Iran? Proxy war with Russia?

Clinton would have been status quo, I give you that for sure.

For Silicon Valley, (and HN by proxy I suppose) Trump immigration policy will be a problem. I think he will prevent/discourage the best and brightest from around the world to come here, work, and bring substantial benefit to our economy (rather than the economy of their homeland).

[1] https://www.youtube.com/watch?v=aWejiXvd-P8 [2] http://www.cnn.com/2016/09/09/politics/donald-trump-iran/


"This directly contradicts what he has said he would do [1],[2]."

I don't think it does, actually. Right now we're involved in a number of military interventions in a number of countries, and I can not articulate to you at all what our interests are in these interventions, or more accurately, what my interests are in these interventions. Theories about Saudi Arabia and Qatar giving money to the Clinton foundation and getting military services in Syria sound at least reasonable to me on the grounds that I have no other explanation for what the hell is going on in Syria, or how it interests me, a fairly common American voter. As near as I can tell, if we "lost" all of those engagements right now and just went home, perhaps with an apology, my geopolitical position would be improved as a result of that in every way, especially in less tension with Russia and other developing powers.

(Aren't liberals supposed to be in favor of the proposition that the US is nothing special, and the world is becoming more multi-polar, and we ought to peacefully stand down and let the American Hegemony dissolve to some extent? As near as I can tell, all of our actions in the Middle East right now are primarily intended to try to hold on to American Hegemony out there. I don't want it, on almost every level, not least of which is our demonstrated inability to stabilize those countries. History tells us what it would take to do it. We don't want to do it. I don't want to do it. It's time to let American Hegemony in the Middle East go.)

That's why I specified that he's more likely to pull back on the things that are currently going on that hardly anybody even seems to realize we're doing. It was actually amusing to me, in a grimdark sort of way, than ANSWER is already planning to start up its protests again [1], as if they could possibly make it any more obvious that they are simply a anti-(R) organization rather than an anti-war one. If they were really anti-war, they should have bee protesting continuously throughout the entire Obama administration, as big as they ever did (props to those rare few who actually have been), not starting it up the instant an (R) is back in office.

Trump appears to be promising to wave a big stick at things that are actually in American interests; I rather anticipate that faced with the threat of much more focused action, those interests won't actually want direct war. It is also, ultimately, the only sane policy... you must threaten to retaliate when your interests are threatened, the game theory is clear, you can't promise to take a nuke to Boston and then sit back and be considered about the response... even if that is what you actually do. You still have to promise (credibly!) that you're going to retaliate.

I think a lot of people are coming in with the assumption that Trump's foreign policy must necessarily be stupid and brutish, and of course, when you come in with that assumption, you'll find plenty of confirmation bias that it's true. I don't think it is. I think people are also coming in with a lot of false assumptions about our current policy and our current situation, such as the guy I saw on HN yesterday who appears to believe that Obama has actually shut down the war in Iraq and that we are currently at peace. We aren't. We're basically at war right now. Given the number of fronts we've got some sort of fight going on, if the situation we are currently in does end up breaking out into World War III, the start date historians assign for that conflict will probably be in our past, and Obama will get "credit" for being the President at its beginning. Personally, I think that a lot of people have a hard time understanding Trump's foreign policy because it's based on the situation that actually exists right now out there in the world, and you've been kept very carefully unaware of what's actually going on out there, so the resulting proposal looks like gibberish to you. Part of my vote for Trump was actually to avoid World War III, which contrary to the impression most people seem to have, is actually the course we are currently on. The powder keg is already going off. The question is not whether Trump will set it off, but whether he can successfully stop the explosion already in progress. From what I can see, he's taking the steps to do that.

Yes, that even includes making clear declarations that we will defend our interests. That returns predictability to a situation that has become very unpredictable. The Middle East can not be stabilized when the US will decide to knock over your government so that a different government can run a pipeline through your country that you don't want, or whatever other dumbass reason we actually did it for. The Middle East will be stabilized (at least more so) when the US makes a clear declaration that we will only intervene when our direct interests are at stake.

My personal opinion is that the Clinton campaign has done their best to claim that Trump is going to be a madman deploying our military every which way and nuking whomever he chooses precisely to cover up the fact that our current policy is deploying our military every which way for dubious reasons.

[1]: https://www.facebook.com/events/1068785513242447/


I'm not sure what liberals want, and I agree, we have been at war for something like 15 years now. I suspect that Hillary would have essentially continued our presence in Iraq. In that sense she barely qualifies as liberal.

If you want a good understanding of the geopolitical actions of the countries of the world, a good place to start is with one of the two books by George Friedman (The Next Decade, and The Next 100 Years). These books give compelling reasons why Russia is doing what it is doing, why we need to work with Iran, and the demographic reasons for turmoil in the middle east.

I think the difference between the candidates was that Hillary understood strategically why we have not done more to help Syria, why ISIS is a minor player, why accord with Iran is important, and why the recent activity by Russia in Syria and Ukraine are both predictable and not incredibly dangerous. I don't think Trump understands any of this, but my guess is that he is getting a crash course in it right now. I hope he can learn. I also hope he's smart enough to keep his emotions in check when and if something important comes up because if he treats the button like he treated his twitter account we are screwed.


Yes even the Peso has already recovered from its after hours low, that means that the market already had priced in the "Trump risk", it just erased any gains propelled by the Clinton optimism of the past few days, right now is trading better that its all time low from a couple of weeks ago.


Earlier indicator that traders expect higher volatility under Trump https://www.brookings.edu/wp-content/uploads/2016/10/what-do...




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