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February 25, 2016 | The Donald

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.


The most startling thing many Canadians may know about Donald Trump is his wonky antenna.

For two days last autumn traffic in the epicenter of downtown Toronto’s financial core ground to an angry halt when the spire atop the Trump Tower looked like it was swaying in the breeze. “In a big city like this, people have to be responsible for their buildings and their actions,” said a pissed-off mayor.

After 48 hours of relative chaos, the pointy thing was declared safe and life went on. So did the lawsuits. The Donald is being flamed by the tower’s developers, who want out of a deal forcing them to use his name. Meanwhile that company’s battling owners in the hotel-condo edifice suing because their investments went south. For them, the Trump tag carried no magic.

The guy with the large hair and outsized ambition has done similar branding deals around the world. He’s made and lost fortunes. Been a financial star and a bankrupt. Yes, he’s worth a few billion, but usually leaves a debris trail of controversy behind him. In the last few days, mainstream media dudes have been dissecting the entire Trump empire looking for issues, like the Toronto project, because suddenly this man matters.

And he does. So pay attention. The anti-Trudeau may next week take a giant leap towards the White House.

As you know, Trump’s romping towards the Republican nomination. With big wins under his belt in three primaries and caucuses, huge voter turnout and broad demographic support, he’s set up to dominate Super Tuesday’s polling – a mini version of a national vote. Marco Rubio and Ted Cruz are toast. This is the year of the outsider in US politics, and not just for the neocons.

On the left Hillary Clinton’s in a wholly shocking battle with lefty Bernie Sanders, and while she will likely emerge the Democratic nominee, it’ll be as a wounded one. What the November presidential election will bring is eight months away, and unknown. However, markets are starting to factor President Trump into their risk equations.

What does this mean for you?

On the surface, our two countries continue to cleave, despite being glued together. The US economy’s been expanding with robust labour force growth, rising GDP, plumping average wages, falling federal deficit, reduced household debt levels and swelling interest rates. Us? Not so much. Low oil helps America but clobbers Alberta. Our rates are stuck in the ditch and Ottawa’s about to plunge back into red ink. Job creation here sucks and we’ll be lucky to see a 1% economic advance this year. Half the country’s households would be up the creek if they faced an extra $200 monthly bill. And just peruse the moany comments here yesterday about Canadians’ inability to use (or want) a great tax shelter – we’re turning into a passel of governmentaholics.

We chose T2, and a big swing to a left-of-centre, tax-and-spend majority administration with a gender-parity leaning that Trump’s already called silly. Moreover, he’s accused his rival Ted Cruz of being unfit for office because he likes Nickleback and Justin Beiber (hard to see that as a negative), being born of a Canadian mom. Hmm. This may not go well.

But what might President Trump do to the markets – or even the hint of it happening?

It adds uncertainty and will likely spike volatility. China, oil, Brexit, the Fed and corporate earnings are already enough to focus on. Adding a rebel to the Oval Office is just one more thing to consider when assessing risk. Markets hate unpredictability. Trump defines it. As one money manager put it to Bloomberg yesterday: “This political cycle is filled with more drama than usual. The extremity of a Trump or Cruz or Bernie creates the illusion that the winner is going to be more of an extreme character.”

While Prez Donald might goose the fortunes of defence contractors, infrastructure companies and consumer-focused corporations (due to a promised tax cut), he would be toxic for financials (Trump wants to break up the banks) and bad news for Canuckistan. The Republican would not only shut out Canadian companies from bidding on US projects, but stress energy independence (bye-bye AB crude) and even abrogate the North American Free Trade Agreement. The worst news if you build cars in Oshawa or Windsor.

Trump would also likely harden the US border, affecting trade, make it more of a pain for some people (like Muslims) to cross, police snowbirds more carefully (182 days or pay) and exert huge pressure on Ottawa to get back into the fight against ISIS.

Of course, it’s all speculation. The guy could blow up. Hillary could dominate.

Then again, Trump’s appeal to the disenfranchised, the dispirited middle class, the underdogs, the angry, the free-enterprisers and the core conservatives is magnetic, and growing. Disgust with the political class and Wall Street has turned a billionaire with a trophy wife, a collection of skyscrapers and a personal air force into a populist folk hero.

As we’ve learned in Canada, sometimes there’s no accounting for how people vote. Only consequences.

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February 25th, 2016

Posted In: The Greater Fool

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