Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
Investors Green-Light Infrastructure Trade, But Expect Road Bumps
"A bipartisan group of U.S. senators met with administration officials this week to discuss legislation to spend $1 trillion to improve infrastructure."
That sounds like the Donald's campaign promised that he walked back many months ago. CNN recently reported: "A White House official said on Tuesday the current proposal -- set to be unveiled in the middle of January -- would propose spending at least $200 billion on infrastructure projects over the next decade, with the hopes of spurring an additional $800 billion in state and local funding."
That's just $20B/year. To put that in perspective, $20B is about what he'd like to spend on protecting American shores. Not from rising tides and water surges and intensified storms in the decades to come, but from surging immigrants. That's also about what it may cost to build a few miles of subway in NY (Second Ave. Subway - $17B and growing).
The article seems somewhat conflicted, saying on the one hand that "Engineering and construction companies are a late-cycle industrial play" (i.e. this is cyclical), and on the other hand that "You can make a multi-year argument that there is pent-up demand for things like waterworks and roads and bridges and highways,"
The need is there and has been there for many, many years. Even the full $1T would close only half the $2T gap (ASCE figures).
Late cycle might be an argument that in good economic times the government has more money spend on that need, but the government just added an extra projected $1.46T to the national debt over the same ensuing decade. So it's not clear if even $200B let alone $1T could be budgeted.
I think infrastructure is a good niche to invest in for the long term, but IMHO the way to do it is with global funds that can move money back to US companies if and when the US gets its act together.
Comments
That sounds like the Donald's campaign promised that he walked back many months ago. CNN recently reported: "A White House official said on Tuesday the current proposal -- set to be unveiled in the middle of January -- would propose spending at least $200 billion on infrastructure projects over the next decade, with the hopes of spurring an additional $800 billion in state and local funding."
That's just $20B/year. To put that in perspective, $20B is about what he'd like to spend on protecting American shores. Not from rising tides and water surges and intensified storms in the decades to come, but from surging immigrants. That's also about what it may cost to build a few miles of subway in NY (Second Ave. Subway - $17B and growing).
The article seems somewhat conflicted, saying on the one hand that "Engineering and construction companies are a late-cycle industrial play" (i.e. this is cyclical), and on the other hand that "You can make a multi-year argument that there is pent-up demand for things like waterworks and roads and bridges and highways,"
The need is there and has been there for many, many years. Even the full $1T would close only half the $2T gap (ASCE figures).
Late cycle might be an argument that in good economic times the government has more money spend on that need, but the government just added an extra projected $1.46T to the national debt over the same ensuing decade. So it's not clear if even $200B let alone $1T could be budgeted.
I think infrastructure is a good niche to invest in for the long term, but IMHO the way to do it is with global funds that can move money back to US companies if and when the US gets its act together.