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US Election 2012
October 2012
US Election and Markets 2012/13
Chief Economist Steen Jakobsen
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Economics one-on-one
Macro
Micro
Joseph Schumpeter John Maynard Keynes
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The US business cycle could not care less…..
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President Obama did keep one promise...
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Obama’ inherited this in 2008…..
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Obama’s presidency in raw numbers
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Everybody’s hero: Prez Reagan started the excess….Obama perfected it…
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Obama & Bernanke went all in ……
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Election cycles & other mumbo jumbo statistics..Theory #1
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Election cycles & other mumbo jumbo statistics..Theory #1
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Election cycle & other mumbo jumbo statistics..Theory #2
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Election cycle & other mumbo jumbo statistics..Theory #2
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US economy is close to the inflection point
• Fiscal cliff is serious for US and global economy
• Private sector is printing jobs on par with 05’
• Housing has stabilised, net positive in 2013
• US shale gas – a major game changer
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Why does fiscal cliff matter to investor…the math:
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The wonders of micro economy and markets
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Game changer: US shale gas
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Demographics are not a drag compared to peers
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“Reality divergence” largest since Dot-com bubble
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The law of mean reversion
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US election investment conclusions
US Dollar will be cyclical stronger over next period (long USD)
Long yield at historic lows (short fixed income vs. Stocks)
Unit Labor cost importance will fall – Reshoring (Buy US vs Asia)
Both absolute- and relative valuation stretched – correction before decade long outperformance (2013 = transition)
Short Crude/Coal vs. Natural Gas
Micro-economy best ever – buy Small Cap stocks vs. Big Cap
Phase out long Gold and ”being scared” trades….