Macro Dragon = Cross-Asset Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime.
(These are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)
Macro Dragon: Biden’s VP Pick is likely to be POTUS
Reflections of a Strategist…
- How can Biden monkey wrench his presidential election chances?
- Simple, completely pass over electing a minority, let alone a woman – which would be the polar opposite of what he has promised. The probability of this is actually negative.
- Now if he really wanted to guarantee a good shot of Trump winning, he could always pick 30K-Emails-Went-Missing-Hilary! 🙂
- What would be the ultimate slam dunk?
- Yep you guessed it, Michelle Obama. Whilst Biden seems to be in robust health & fitness, especially for his age, given the highly demanding role of being POTUS it is highly plausible that he may not serve out his full four year term if he wins. And almost certainly not the 2nd
- Michelle would crush it as both VP & eventually POTUS – more importantly it would solidify the democratic base & avoid the slippage of the Bernie fanatics who are my way or the highway. Probability of this though is likely sub 10%… i.e. As cool as it would be for America to see its first female & minory, as a VP & then eventual POTUS… plus Obama being the First Gentleman (As opposed to First Lady)… think 8 yrs in the Whitehouse is enough for any family. Plus now they are wealthier, have recalibrated to life outside the confines of non-stop media attention & pressures that would crack most people open like an egg.
- KVP would never want to be POTUS. There are positions & there are POSITIONS – more on that on a separate note. Yet being POTUS would be a slog… so much of the structure of the system works against the role. With the one key exception being US Foreign Policy.
- It seems like Kamal Harris is the favorite to win, yet to KVP she’s from California (remember outside of Cali her support fell off a cliff). California is a democratic stronghold – i.e. likely nothing is really going to be gained from an additional votes perspective, now someone out of one of the swing states, perhaps Demings in Florida (Shout out to Bobby from Macro Eagle on this, pure copy paste business here! : ) makes a lot more sense to KVP.
- A lot of folks are expecting turbulence around/going-into the elections, with Sep/Oct (maybe even late Aug) potentially being choppy. Concerns range from us not knowing the results on election nights (i.e. due to increased use of voting by mail) to potentially Warren being elected as Treasury in a Biden Presidency, to Trump not accepting a defeat, to Biden not accepting a defeat, to chaos in the streets, etc.
- KVP is still calibrating on this – now generally speaking the consensus view is correct, because momentum is consensus. Yet we’ve been through so much this year, where if someone gave you the facts of what was to occur from an economic or fundamental perspective, you would likely have gone broke trying to trade that view beforehand in the market, i.e. foresight with failure. KVP wonders if there is actually a situation that clearly marks the election as a win to Biden, i.e. early count suggesting a landslide to the Biden camp in swing states…. again Trump NEEDS Florida – & we know how empathetic he has been in regards to protecting seniors from C19 right?
- For now KVP feels that this US election is once again for the Democrats to lose. Everyone focuses on the Trump Win in 2016, yet really it was The Hillary Loss & the democratic establishment stabbing Bernie in the back & running him over several times. Its really Biden & his soon to be anointed VPs to lose. Lets see how the dice roll over the next few months.
- One thing that KVP may differ from most people on (Again) is actually, Warren as US Treasury in a Biden administration would be super bullish for markets. Don’t get KVP wrong, initial reaction would likely be negative… as folks would quake of regulatory risks & measures… yet from KVP’s viewpoint… if you think hand in the cookie jar Mnuchin has been loose with the purse strings, you ain’t seen spending yet. Warren is going to take liquidity & treasury funding to new heights…. again underlining the current Liquidity Is King Regime.
- We’ll delve deeper into this over the next few wks, obviously the polls on Trump will be like the polls on the votes for Brexit, there are stealth voters who don’t necessarily come up in the polls nor would they be transparent about their decision. And there are guys like Schwarzman from Blackstone who contribute loud & clear to team Trump. Don’t be surprised as Blackstone has huge exposure in real estate – among other things.
To Keep In Mind Today
- JP: Bank lending, Current Account & Economy Watchers
- UK: Avg. Erns Index, Claimant Count Change, Unemployment Rate
- EZ: ZEW Economic Sentiment, GER ZEW Economic Sentiment
- US: PPI, NFIB Small Biz Index
- CA: Housing Starts
Start-to-End = Gratitude + Integrity + Vision + Tenacity. Process > Outcome. Sizing > Idea.
This is the way