This week we chat with Mickey D. Levy, chief economist for US and Asia, Berenberg Capital Markets. Mickey is a long-standing member of the Shadow Open Market Committee and conducts research on a wide range of global economic, financial and policy issues.  

The Lead Left:  Mickey, believe it or not, it’s been almost exactly one year since your last visit with us. I assume where we are politically today isn’t something you anticipated back then.

Mickey D. Levy: I certainly did not anticipate this. But over the last year, my traditional optimism about the US economy has been challenged and I have become increasingly frustrated with economic performance and the way policymakers on all levels of government seem to be pursuing policies that in my mind have been heading toward further slowdown in potential growth and not really addressing the critical issues facing broad ranges of people. From an economist’s vantage point, it has been easy to understand the mounting public frustrations.

TLL: Looking at your commentary the day before the election, you did (like the rest of us) think markets would have a negative reaction to a Trump win. Why didn’t that happen? 

ML: Just prior to the election I recommended that investors should sell a “relief rally” generated by a Clinton victory and buy stocks following a sell off generated by a Trump victory. My rationale was that the realities of a Clinton victory–expectations of eventually slower potential growth as a consequence of higher spending, taxes and regulations–would begin to weigh on markets, while Trump would at least pursue policies that were designed to lift growth–and I also argued that the role of the Presidency and the Washington bureaucracy would tone down some of his erratic and abusive behavior. 

TLL: In your recent post-election commentary, you state that “global portfolio managers will focus on the fundamentals.” What asset classes will benefit from that focus?