FIN 101: Spotting Gurus, Paid Liars, Fools and Cheerleaders (Part 2): Donald Trump on Oil
“If you can't spot the sucker at the table after 10 minutes, leave... it's you. “
It is important to identify: Gurus, Paid Liars, Fools and Cheerleaders, when you have the opportunity. Thanks to the internet, yapping a WHOPPER is easier to detect and soiling ones reputation can be quick. Today, we have to thank Bespoke Investment Group for watching Donald Trump and doing a nice write up.
Let see if we can call Trump a: Guru or Cheerleader or Liar or a Fool
Donald Trump on CNBC here;
From Bespoke Investment Group
Donald Trump on Oil
CNBC viewers had the "privilege" to get Donald Trump's thoughts on the economy, oil and OPEC yesterday morning. Click here to view the video. One of Trump's proposals was to "tax the oil companies into oblivion" since they're making so much money now. Joe Kernen eventually went on to ask Trump if he would support the same taxes on real estate if it was as hot as oil was right now. Trump's response, "Yeah, but the fact is it's not hot like oil. You know, oil's been hot forever...I tell people to go into the oil business because since I've been growing up, literally, it's never had a down tick. I mean, it had one year where it was a little bit down, but basically it's never had a down tick." Kernen went on to ask about the long periods when oil didn't go anywhere, but Trump wasn't having any of it.
Below we highlight the inflation adjusted performance of oil and new home prices from 1970 to 2000. As shown, oil did nothing but tick down from 1981 to the late 90s, while real estate stayed in a pretty nice uptrend over the 30 year period. We realize these are residential real estate prices, but the trend was pretty much the same in commercial, which Trump is involved in. While oil has had its fun this decade, it definitely hasn't "never had a down tick."
The oil vs home price chart should help here.
Of interest the other suspect in the CNBC room none other then Wilbur Ross.
Mish Shedlock does a good write up as this Mr Ross' plan to Privatize Profits and Socialize housing losses. A self-serving non-solution to negative equity in America
"Wilbur Ross, US's second largest servicer of subprime mortgages via acquiring American Home Mortgage and Option One, has a self serving non-solution to negative home equity.
Inquiring minds may wish to consider A positive solution to negative equity in America."