HYBRID VIGOR: VOL 3 ISSUE 43 "Rebuilding"

How does a carny barker, son of a Scot and a landlord, dropped in the middle of Celebrity Apprentice by Hollywood, enriched while massively in debt, turn out to be our nation’s president?

Just when I thought I was ready to move on to focusing exclusively on the rebirth of convertible issuance—a rebirth I expect will kick in over the next few years—two of my main cover themes came together.  To borrow from the last president who had issues with self-control and ethnic groups, let me make one thing perfectly clear:  while Hybrid Vigor is a team effort, the opinions expressed in the cover are entirely my own.

As tempted as I am to discuss Donald Trump’s demand that the cast of Hamilton apologize for its public entreaty that Mike Pence govern on behalf of all Americans, I’ll focus instead on what matters more to readers of this publication: how the president-elect’s policies may affect the economy and the markets.  I don’t like what Trump is doing to our country’s social fabric, but I do think his economic policies deserve a chance, and I think, if implemented, they’ll be great for the convertible-bond market.  Infrastructure spending should not only lift interest rates but also give rise to issuance by all manner of small and mid-size domestic manufacturers and service providers—especially in conjunction with the president-elect’s anti-globalization views.  Those views, put into practice, will almost surely have at least some inflationary effect, helping domestic businesses at the expense of consumers and thus reversing the trends of the last several decades.

It will be interesting to see how the Republican majority handles his Keynesian vision for rebuilding the nation’s economy through infrastructure spending, spending I think America has been craving for years with the world’s encouragement.  Paul Ryan couldn’t bring himself to be seen with Trump during the campaign. Now he’s talking about a unified Republican party, even a party whose leader and public face used to be a Democrat and is promoting a new New Deal. What do Ryan and his acolytes do now? Volatility, anyone?

(This is the cover letter for the subscription-based weekly Hillside's Hybrid Vigor newsletter. For a complete copy, please contact John Anderson at + 1 (646) 712-9289 x 107).