The Candidate 2016? Part Three
Continuing from Part 1 and Part 2... the finale, Part 3 of 3
Discussion, critique and analysis of the potential impacts on equity, bond, commodity, capital and asset markets regarding the following:
Vote James Madison?
Above, what's it worth? $2.1B. As of October 19, 2016: Clinton’s campaign has spent 93 percent of what it has raised so far. Trump’s campaign has spent 96 percent of what it has raised so far. - Washington Post
Is the path of least resistance, to pander to what the electorate is indoctrinated with, rather than take the harder path of addressing what really needs to be done? viz. In all four presidential debates, three frontline topics: Global climate change; Wall Street regulation and Black lives matter, were never brought up once. - Fortune
Vote Leland Gaunt?
Vote Catalyst?
Will asset markets eventually capitulate to the gravity of economic reality, if so, when? and what could be a catalyst? This years US presidential election result could be a seminal event which changes market sentiment, not just about one stock, but the markets, all sectors and asset classes, on a global scale.
In election years, large pre election market moves are rare. Since October 25th, the SP500 has declined 9 days in a row, which did not happen during the 2008 crash, and has not happened since the 70's. Regardless of the victor and nature of the election result: with the election year in the rear view mirror in 2017, market volatility will probably increase.
A Clinton victory could be translated as business as usual with a slight uptick initially. If Hillary gets a concomitant clean sweep of both houses to democratic control, markets could react in a major upswing.
A Trump victory could be translated as rocking of the boat or "status quo". If "The Donald" wins, the markets could react initially to the downside. Any post election mention on Trump's part of moving swiftly to impose trade tariffs, or dismantle cabinet agencies, could precipitate a major downswing.
If one wanted to bet on near term market direction, betting the odds on favorite Clinton to win, by going long equities, US dollar and JPY Yen (more dollar carry trade for liquidity), and short bonds, gold, other currencies vs USD, and commodities, would seem to be the most probable bet. Then again, you never know as Clinton could get "Gored". TBD.
And It Is Upon US?
Do truly prosperous times give rise to demagogues or spawn duplicitous mercenaries? Motive (a reason), opportunity (means) and intent (state of mind) are ingredients for the commission of a crime. Anger and hatred are emotional states of mind which can mask fear. It seems that potent cocktail (bartender, one "Leland Gaunt" please.) may have been amply served and consumed.
In a rush to judgement, how many forego the details, and the fallout of their choices? On November 8th, many disaffected and otherwise, may also have motive and means. Will they abstain? Will they vote? How will they vote? Will they commit a crime? If so, who will be the real victims? Food for thought.
At the end of the day, billions of dollars spent, two major party conventions, 4 televised debates, 7235 delegates, 324M people, and this is what we have come down to, could it be Trump? could it be Clinton? could a third party cause electoral chaos? Keep your eyes to the sky, it could be a brand name, remember all things considered, you really can't complain?
Remember, tomorrow Tues. Nov. 8th, vote early and vote often, but please vote conscientiously.
Summary
- Final 2016 Presidential Candidates.
- Candidates Economic Advisory.
- The Election as a Market Catalyst.
Having a say over one's life and choices is called agency, and it is the illusion of agency that makes democracy such a powerful tool of control. The second most effective means of maintaining power is to limit the choices offered the powerless. Offering the powerless false choices, i.e. the choice between two functionally equivalent options, provides the comforting illusion of agency. - Understanding Brexit - Charles Hugh SmithSmith's posit gives one pause, wouldn't it be nice if we had a choice of None Of The Above? If the NOTA box gets the most votes, then we start an accelerated 90 day process from scratch, with all the previous candidates ineligible to run. Might that make for some refreshing change? So few choices? Does a lack of agency afflict? Is this reflected by a rise in the hate vote, populism, disillusionment, social tension, the disaffected, and the image below?
Vote James Madison?
“Something is rotten in the state of Denmark.” – Marcellus to Horatio, Hamlet, William Shakespeare
Above, what's it worth? $2.1B. As of October 19, 2016: Clinton’s campaign has spent 93 percent of what it has raised so far. Trump’s campaign has spent 96 percent of what it has raised so far. - Washington Post
Is the path of least resistance, to pander to what the electorate is indoctrinated with, rather than take the harder path of addressing what really needs to be done? viz. In all four presidential debates, three frontline topics: Global climate change; Wall Street regulation and Black lives matter, were never brought up once. - Fortune
[James Madison wrote and believed] "A large electorate would protect the system against oppressive interest groups. Politics practised on a grand scale would be more likely to select people of “enlightened views and virtuous sentiments”.
What Madison could not have foreseen was the extent to which unconstrained campaign finance and a sophisticated lobbying industry would come to dominate an entire nation. You can kick individual politicians out of office, but what do you do when the entire structure of politics is corrupt?
The problem is not... that the election will be stolen by ballot rigging. It is that the entire electoral process is stolen from the American people before they get anywhere near to casting their votes. " - The Man in The MirrorIs there truth in the above? Could this be a partial affliction of our current version of democracy in a Republic? Or something deeper?
Vote Leland Gaunt?
Here’s the part that economists, policymakers, and the media (all three largely indistinguishable from each other) miss – lack of true growth is contraction, and the worst kind because it isn’t recession contraction it is depression contraction. In the former, all is forgotten after a time; in the latter where even occasional positive numbers can be and often are highly deceptive, time is the biggest problem. - The Story of Durable GoodsExpectations are "firmly anchored", yet how many believe that unemployment is below 5% and inflation below 2%? The empirical evidence is examined at length by many a discerning and qualified eye. Is there more than meets the eye? And on many accounts, why does so little add up? So little time?
Either you focus on labor or on capital. End of the day, [the government] has to decide whether it wants to favor, "Wall Street" or "Main Street". Our politicians and central bankers alike have indeed sowed "The Grapes of Wrath", putting financial assets at risk of heightened political backlash from the have-nots of the real economy, namely "Main Street" versus "Wall Street". - MacronomicsAt the proverbial fork in the road, with time being of the essence, one might query: Which "Street" would either candidate take? Are this elections circumstances reflective of a lowered standard of living for many, growing income inequality, attendant social discord and unrest? Are the growing number of disaffected derivative of legislative gridlock and ineffective government, corporate and monetary policy?
“As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people.” ― H.L. MenckenCan bright people of conscience, enlightened views and virtuous sentiments be blinded to socio-economic realities? Are these signs of a disturbing change in the moire of American mainstream societal fabric? All of the above can lead to socio-economic and political instability which can greatly affect the economy and markets.
"When I started out I was just a peddler moving across the blind face of a distant land. Moving, always moving. Always gone... and in the end I'd always offer weapons. And they'd always take them. Of course I was gone before they realized what they'd purchased." - Leland GauntAs Leland Gaunt knows all too well, in their clamor for gratification, "needful things" will pay a far heavier price than expected to assuage their fears and fulfill their desires. In regards to our two previously highlighted queries, the devious Mr. Gaunt in his devilish amusement might quip: So few choices? So little time? So many questions? And... What was your desire? Is there prescience in the fine print of the 1972 movie poster below?
Vote Catalyst?
"People forget, as the media seems to, that all those other "good" [GDP] quarters amounted to the same false hope. It keeps most people hanging on to the recovery narrative for a little longer when by any actually meaningful context there never was one - and so long as conditions remain as they are, there won't be one." - The Variations Of GDPLooking forward, regardless of the current GDP print, further downturn in global economic climate is probable; viz. continued economic and revenue contraction. A seeming dearth of sound economic expertise "on the hill"; the furtherance of constrictive central bank monetary policy; and other factors (rising spreads) effecting market rates; are foreboding clouds on the economic horizon.
Will asset markets eventually capitulate to the gravity of economic reality, if so, when? and what could be a catalyst? This years US presidential election result could be a seminal event which changes market sentiment, not just about one stock, but the markets, all sectors and asset classes, on a global scale.
In election years, large pre election market moves are rare. Since October 25th, the SP500 has declined 9 days in a row, which did not happen during the 2008 crash, and has not happened since the 70's. Regardless of the victor and nature of the election result: with the election year in the rear view mirror in 2017, market volatility will probably increase.
A Clinton victory could be translated as business as usual with a slight uptick initially. If Hillary gets a concomitant clean sweep of both houses to democratic control, markets could react in a major upswing.
A Trump victory could be translated as rocking of the boat or "status quo". If "The Donald" wins, the markets could react initially to the downside. Any post election mention on Trump's part of moving swiftly to impose trade tariffs, or dismantle cabinet agencies, could precipitate a major downswing.
If one wanted to bet on near term market direction, betting the odds on favorite Clinton to win, by going long equities, US dollar and JPY Yen (more dollar carry trade for liquidity), and short bonds, gold, other currencies vs USD, and commodities, would seem to be the most probable bet. Then again, you never know as Clinton could get "Gored". TBD.
And It Is Upon US?
Do truly prosperous times give rise to demagogues or spawn duplicitous mercenaries? Motive (a reason), opportunity (means) and intent (state of mind) are ingredients for the commission of a crime. Anger and hatred are emotional states of mind which can mask fear. It seems that potent cocktail (bartender, one "Leland Gaunt" please.) may have been amply served and consumed.
In a rush to judgement, how many forego the details, and the fallout of their choices? On November 8th, many disaffected and otherwise, may also have motive and means. Will they abstain? Will they vote? How will they vote? Will they commit a crime? If so, who will be the real victims? Food for thought.
At the end of the day, billions of dollars spent, two major party conventions, 4 televised debates, 7235 delegates, 324M people, and this is what we have come down to, could it be Trump? could it be Clinton? could a third party cause electoral chaos? Keep your eyes to the sky, it could be a brand name, remember all things considered, you really can't complain?
Remember, tomorrow Tues. Nov. 8th, vote early and vote often, but please vote conscientiously.
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