It’s Not Really About Trump

This election is not really about just COVID, Black Lives Matter, Trump, or any other one topic, it is about the Conservative philosophy vs the Liberal philosophy. My pre-election summation this morning, is the big speculative money is on the conservative side and believes Trump will win and as a backstop they are filling the media with the idea that a Biden win will unleash huge stimulus. The betting markets back this up.

So it may be important to drill down into the Conservative vs Liberal debate.

Probably first, the Conservative movement is not about Trump, he is not even conservative, he is without beliefs beyond himself and gold door handles.

The current Conservative movement started with Reagan and the supply side trickle downers, it barely relates to the Eisenhower/Rockefeller Republicans of the past. More importantly the Conservative side in its current configuration is about the Koch’s and the Tea Party boys that were spawned out of their organization. Trump and his Proud boys are really just the foot soldiers that have been sent into battle, their ideas are kind of meaningless.

On the Liberal side, unlike the Republicans where the Bush / Rove elitists were abandoned in 2016, the Democrats still are holding on to the their Clinton/Obama/Carville elitist roots. It will probably work today because the Republican’s foot soldier, Trump was such a bad President and women, minorities, and the youth vote is appalled at the Covid response.

Looking to the future…

I think we are looking at, as Strauss and Howe point out in their book “The Fourth Turning”, which can be searched in our archives, a transformative period with historical energy. We should see the Progressive side of the Democratic Party launch into a majority of the Democratic party (today it is only about 35 to 40 % of the party, which is why Sanders or Warren could not get traction). With that said, I think this new Progressives movement will abandon Sanders socialist ideas and talk as the country moves into new ways of viewing government programs and financing, ideas spawned during the COVID period.

The Republican side will be even more interesting, At some point, the Trump / Pence / Proud Boys / Tea Party movement will be recognized as what it is, a Black Hole. Something new will evolve and I have no idea of who will lead it. It is wide open, if I were younger I would look at it as something to pursue.

Back to the Markets

The markets are stretched on this election day with the S&P touching the February Pre-Covid high area around 3393. Here is what the inputs to our Macro Cycle look like this morning. The betting is that we will see a move to 4500 on the S&P. I would take the other side of that bet.

As we have mentioned in the past few days, the two inputs that have gone down the most since August 7 are 20 year bonds and gold. So to me the euphoria expression of the markets going forward is misplaced.

And here is the chart which shows the breakdown and bounce of the past few days.

And one final comment, psychological studies that compare the conservative mindset vs the liberal mindset have shown repeatedly that conservatives view empathy as much less important than liberals do. So we should not be confused by the COVID death response of the Trump Administration.

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