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REIA November 17, 2016

Kahan Consulting Ltd. Election 2016 Surprise: Sam Kahan. REIA November 17, 2016. Kahan Consulting Ltd. │P: 773.809.4697 │ E:kahan.sam@gmail.com. Thoughts: The Day After Election I. Likely Outcome • Lower taxes • Fewer regulations • Higher spending, especially on infrastructure

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REIA November 17, 2016

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  1. Kahan Consulting Ltd. Election 2016 Surprise: Sam Kahan REIA November 17, 2016 Kahan Consulting Ltd. │P: 773.809.4697 │ E:kahan.sam@gmail.com

  2. 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

  3. 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.

  4. Election and Markets So far, markets have emphasized the positives and downplayed, (ignored) the negatives

  5. Economic Growth, GDP, (1999 to 2017)

  6. Commercial Real Estate, (1999 to 2016:Q3) In Dollars Relative to GDP

  7. Residential Real Estate, (1999 to 2016:Q3) In Dollars Relative to GDP

  8. Thank You ! ! ! Sam Kahan Kahan Consulting Ltd. Phone: (773) 809 – 4697 E-Mail: kahan.sam@gmail.com

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