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Deutsche Bank Chief Economist Just Happy To Feel Something, Anything Under Trump

David Folkerts-Landau says the president-elect will prove to be the economic stimulant America craves so badly.
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By Nordenfan (Own work) [CC BY-SA 4.0], via Wikimedia Commons

By Nordenfan [CC BY-SA 4.0], via Wikimedia Commons

Being a high-powered executive at a major global investment bank may seem like a charmed life. But after a while, multimillion-dollar compensation packages and 3,600-square-foot Central-Park-view apartments start to lose their luster. The world becomes a crushing bore whose only escape is deviance from the norm. The risky and the unpredictable provide the sole respite the steady drumbeat of the quotidian.

And if you're an economist, like Deutsche Bank's David Folkerts-Landau, the last few years of meager global growth have left you wanting to feel something, anything. That's when you reach for the Trump.

At a dinner with journalists Monday, Folkerts-Landau enthused that under the Donald, the economy might shift into a higher gear. Reuters reports:

"We will see a move from dogma to pragmatism," David Folkerts-Landau said at a dinner with journalists on Monday, forecasting U.S. economic growth in 2018 would be more than double the 1.5 percent seen for 2016.

"While Trump introduces higher uncertainty, this is better than the near certainty of the continuation of a mediocre status quo," Folkerts-Landau wrote in a presentation for the event in Deutsche Bank's striking glass skyscraper, which is prominent on Frankfurt's skyline.

The promise of tax cuts and infrastructure spending – administered under “business men administration” – has “the potential of reigniting productivity growth and raising U.S. growth potential,” Folkerts-Landau said, meanwhile, in a note to clients. His estimates show U.S. growth roughly doubling over the next few years.

Even risks like a worldwide trade apocalypse are worth taking for a taste of that sweet, sweet growth. From CNBC:

The analysis also takes a more optimistic view of Trump's expected "America first" agenda when compared with other Wall Street views that have cited the danger of a potentially isolationist U.S. that starts trade wars with global competitors.

"This approach should produce a new order that will ultimately be more stable in the sense that 'good fences make good neighbors,'" Folkers-Landau said. "However, we do note that the uncertainty about the Trump administration's policies is still large, as is the reaction of those impacted by these policies."

Of course, Deutsche Bank's interest in the Trump presidency isn't all abstract. The German lender is Trump's top creditor, having participated in some $2.5 billion in loans to Trump entities and an additional $1 billion in loan commitments. Even if there's a new president come 2020, Deutsche Bank won't be getting off the Trump anytime soon.


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