Strategy
Kahan Consulting Ltd.
Info
Analysis
Election 2016 Surprise:
Sam Kahan
REIA
November 17, 2016
0
Strategy
Analysis
Info
Kahan Consulting Ltd. │P: 773.809.4697 │ E:[email protected]
Thoughts: The Day After Election I

Likely Outcome
• Lower taxes
• Fewer regulations
• Higher spending, especially on infrastructure
• Foreign trade less liberal especially China and Mexico
• Restrictions on foreign immigration

Likely Consequences
• Faster inflation
• Higher interest rates and steeper yield curve
• Weaker FX dollar
• Wider US budget deficit and US outstanding debt
• Increased role for fiscal vis-à-vis monetary policy

Possible Consequences
• Economic Growth: unchanged or stronger.
• Federal Reserve more assertive or not
• Flatter yield curve or not
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Thoughts: The Day After Election II

Sectoral Impacts
• Positive: Defense, Real Estate, Energy, Pharma, Transportation.
• Negative: Alternative energy, trade, commodities
• Manufacturing: + output (maybe); + employment (not likely)
• Implementation not immediate; 2018 or 2019 likely

Political Dimension
• Republicans control legislative and executive branches
What of Internecine conflicts?
• Democrats: opponents or “loyal opposition”?
• Frank-Dodd and other legislation?
• Trump Administration does not start until January 20, 2017.
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Election and Markets
So far, markets have emphasized the positives
and downplayed, (ignored) the negatives
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Kahan Consulting Ltd.
Economic Growth, GDP, (1999 to 2017)
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Kahan Consulting Ltd.
Kahan Consulting Ltd.
2016Q1
2015Q1
0.2
2014Q1
2013Q1
2012Q1
2011Q1
2010Q1
2009Q1
0
2008Q1
Commercial
2007Q1
40
2006Q1
80
2005Q1
1.6
2004Q1
100
2003Q1
In Dollars
2002Q1
160
2001Q1
180
2000Q1
120
Percent
Commercial
1999Q1
2016Q1
2015Q1
2014Q1
20
2013Q1
2012Q1
2011Q1
2010Q1
2009Q1
2008Q1
2007Q1
2006Q1
2005Q1
200
2004Q1
2003Q1
2002Q1
2001Q1
2000Q1
1999Q1
Billion $
Commercial Real Estate, (1999 to 2016:Q3)
Relative to GDP
Commercial/GDP
1.4
1.2
140
1.0
0.8
0.6
60
0.4
Commercial/G
DP
0.0
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Kahan Consulting Ltd.
0
2016Q1
2015Q1
400
2014Q1
2013Q1
2012Q1
2011Q1
2010Q1
2009Q1
2008Q1
2007Q1
2006Q1
200
2005Q1
7.0
2004Q1
In Dollars
2003Q1
300
2002Q1
500
2001Q1
800
2000Q1
Residential
1999Q1
1999Q1
2000Q1
2001Q1
2002Q1
2003Q1
2004Q1
2005Q1
2006Q1
2007Q1
2008Q1
2009Q1
2010Q1
2011Q1
2012Q1
2013Q1
2014Q1
2015Q1
2016Q1
Billion $
Residential Real Estate, (1999 to 2016:Q3)
Relative to GDP
Residential/GDP
1000
6.0
900
5.0
700
600
4.0
3.0
2.0
Residentiall/GDP
Residential
1.0
100
0.0
6
Thank You ! ! !
Sam Kahan
Kahan Consulting Ltd.
Phone: (773) 809 – 4697
E-Mail: [email protected]
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Kahan Consulting Ltd.