RBG, RFS and Other Political Economic Indicators Emerging

Mid-September Election Update

Key signals:

Stimulus Bill
Trump SCOTUS Picks
RFS Waivers have come to fruition
Continued Protests
Farm, Airline and Auto packages
Targeted Market Stress

Regardless of your personal politics, the passing of Ruth Bader Ginsburg is a loss to the nation. She was a titan in American history and her relationship with her ideological counterpart should be a model of how American politics should operate.  That said, her passing is a seismic event in an already dramatic year. With tensions already at a high level, there will certainly be weaponization of RBG’s death on both sides of the aisle to boost voter turnout.  The Biden campaign will certainly point to Roe vs Wade and other social issues as a reason to vote in both Senate and Presidential campaigns. The Trump administration is an advantage here being able to pull the trigger in December meanwhile holding the cards on who is nominated for maximum election advantage. 

There are only 2 scenarios likely playing out over this issue. If Trump wins and GOP hold the Senate, then there would be no reason to rush a confirmation but the reality is that Trump will use this event to dangle picks to politically benefit him in key demographics. Paperwork will be done in October on 2-3 picks and they will be ready to confirm in December in the unlikely event they lose power. 

As I have stated for months both on Twitter and in writings, RFS Waivers were a key issue for Pennsylvania, Michigan, Wisconsin, Minnesota and Joni Ernst Senate race. Trump came through at the very last minute as early voting has begun almost on the very week I speculated.  The agriculture lobby remains the US Senate most powerful and it continues to show its importance as Trump pushes bailout package after bailout package with the most recent one to the tune of $14 billion. I expect not only another one for farmers, but also airlines and possibly auto sector. The advantage of being in charge is that you can dictate money to key areas for your political benefit. 

While RBG will take focus off of stimulus package fight in the media, negotiations continue to happen over the weekend and there is a strong likelihood an agreement is reached this coming week.  This is a welcome distraction to everyone who was facing pressure at home districts, specifically Democrats in districts won by Trump in 2016. The level of certainty that a $1.5 to $1.75 stimulus package is agreed to now goes up to 80%. This along with a continuous Fed pumping of markets, this will likely elevate the S&P to 3600, boosting equities and Trumps re-election chances. Powell has to work to adjust his tech pumping strategy to more value stocks and financials as the jig is up and nearly everyone has noticed what they have been doing since March. 

This strategic market manipulation works in two ways; stability of the market and weaponization against select political forces as their donors are subject to market stresses. I expect this continue for 2-4 years.

If You Are Defending Minnesota, You Are Not Winning North Carolina

Protests turning violent has taken its toll on Democrats. The recent shift by Pelosi, Biden and others having to address and denounce rioters signal that internal polls have begun to throw up red flags in not only Biden’s election strategy, but also House and Senate races. Stimulus delay has put Democrats in tight house races in a precarious position and has seen a number of them revolt against Pelosi.  Yet, with all these issues, Biden is still in striking distance even without serious Obama support materializing and next to no presence in Michigan.

The key signal here is the absence of Obama. For such a powerful political figure to remain on the sidelines only leads to a conclusion that his intention is to raise significant financing under Biden/Harris campaign and redistribute unspent money for 2022 and 2024 strategy. Effectively, 2020 has become a massive fundraiser for the Democrats. 

What does this all mean for the Trump-Biden election?  Well, these indicators for me solidifies swing states like North Carolina, but shifts Arizona to toss-up. Minnesota is in play and it seems Biden is near to losing Pennsylvania. Michigan is an interesting dynamic as the Senate race is in a dead heat which shows that Trump could very well win it. The economic perceived market rebound plays into Trumps hands and I fully expect a jump going into October. 

My current election map has Trump advancing from 270 to 279 with Biden still at 222. Tossup states are going to see a dramatic rise in political and economic action, but Biden is having to defend states that should be safe and prevents him from taking away Red states. The math and time is slowly eating away at Biden’s chances.