By: K(en(neth Louis) G(rant)
Somebody took the papers, and somebody stole the key,
And somebody nailed the door shut, tell me who do you think it could be?
— Lou Reed
At least we didn’t kill each other; there’s that. I’m unaware of a single election-related murder. Maybe I missed a few, but it sure seems like if any had gone down, I would’ve heard about them.
To me, it all boils down to the following: it appears that we managed to hold a national voting sequence without burning the whole joint to the ground.
And this, my friends, is what passes for good tidings in this Great/Once Great/Great Again/Not All That Great/Never Great nation.
Try fitting that on a baseball cap. Maybe a purple one.
The election is now over, and, arguably, we can agree on one thing:
The ending did not come a moment too soon. Blessedly (at least as I see it), the outcomes left everyone a bit frustrated, harboring beefs, carrying grudges, gob-smacked by the unfairness and insanity of it all.
Perhaps it was ever thus; maybe this was what the Good Lord intended.
So, my first piece of post-election risk management advice is as follows: Cool. It. Down. I know that’s what I’m gonna do. I’m going with Lou: ‘round the corner, looking for Miss Linda Lee. Because she (like you) got the power, to love me by the hour, give me double you L-O-V-E.
Hey baby you want it so fast. Don’t you know it ain’t gonna last?
Of course, it makes no difference to me.
Except it does. Make a difference to me, that is. I DO want us to cool it down. Because, really, there’s nothing worth getting all that hot and bothered about (except you, you are worth the heat).
Best of all – unless there are pending electoral Easter eggs (and who’s to say there won’t be?) – it looks like our governance will be played out in split screen (sort of like a big, bureaucratic Zoom video call), implying that not much overly dramatic is likely to transpire out of Washington for a while.
Allah be praised! Because I cannot imagine that there is a single godforsaken soul left in the Lower 48 that would rationally entrust any action or decision of even remote consequence to any current, former, or future denizen of that metropolis.
About the only truly political statement I make at this point is to express my joy that a critical segment of the electorate managed to rise above the deafening din, to roundly reject the dubious concepts of identity politics, and the casting of longstanding institutions as being conceived and rooted in such villainous paradigms that they needed to be dismantled, destroyed, or somehow discombobulated.
Inshallah.
I reckon, though, we’ll have to endure at least another couple of weeks; maybe more, of acting out some final scenes. Sadly, the psychodrama will extend into January, where: a) not one, but two Georgian Senate Seats will enter a runoff; which b) could decide control of the Senate.
NGL, people, I could live without that.
However, assuming that Big Orange stomps his way back to Mar a Lago without kicking up too much of a fuss, that the Speakership of the House does not devolve to the four-headed monster known as The Squad, that the Senate is configured in such a way as to preclude such egg-headed actions as raising taxes, adding states and Supreme Court seats, toe-tagging the Energy and Health Care sectors, etc., there’s cause for significant investor optimism.
Because, c’mon man: how insane is the notion of raising taxes here? Who on earth benefits from that? The Federal Government? Please. They’re going to spend like sailors, with borrowed money, and then instruct the Fed to print away the debt. States and municipalities want to raise taxes, too, and will compete with the federales for our indisputably limited and depressingly depleting supply of taxable income. All of which will cost jobs. Livelihoods. Lots of them.
And all in the midst of a plaguing pandemic. The only turnout more impressive than the national vote count was the truly astounding reproductive chops of them little covid buggers. Yes, my dears, virus counts are surging, and it looks like we’ll be battling this wearisome worm all winter, as the weather up north, if nothing else, cools it down. Laying aside the crippling prospects of a tax hike, we’re way better prepared now. Critical supply and delivery chains are in better order. We are much more proficient at identifying, isolating and eradicating breakouts. Businesses have made adjustments that were unthinkable in, say, February. As have consumers. Infection counts are mounting, but fewer are dying.
Forgive me for saying so, but I also believe that certain state governors (you know who you are) will act with more rationality and economic care in terms of their virus-mitigating measures under a Biden Administration, than they did under Trump I (to say nothing of what they might’ve done under Trump II).
Meanwhile, laying aside (again) the prospects of crippling tax hikes, by all accounts, the economy is roaring back with surprising vigor. GDP, jobs numbers (mad props to anyone, going back to, say, the summer, who had The Under on a 7% October unemployment number), frigging manufacturing PMIs? All blowouts.
Come what may, there’s also another whomping stimulus package in the offing, and, from a valuation perspective, whether it comes under the lame duck session or is deferred till after the new dawn of Joe Six Pack’s inauguration, shouldn’t matter much to investors. It’s coming, and markets should price it in.
While virtually no one noticed, the FOMC met at the end of the week, and announced — nothing. But y’all know what I think about this. They’re in. They will do whatever is necessary; whenever it becomes necessary. Because they have to. Investors should also feature this in their pricing considerations.
Arguably, they already have. Risk assets surged all week, and my guess is that this trend will continue – albeit unevenly.
Sadly, one way of viewing this is through the lens of the incremental shade we are throwing the Dead Prez, which have been sucking wind and continuing their fade with respect to almost everything against which they are measured – stocks, bonds, commodities, other currencies, crypto, etc.
But in a year when all four men whose faces grace the granite of Mount Rushmore (notably, all have their mugs on variants of the USD) have been re-imagined, in varying ways, as racist war criminals, what else could you expect?
I reckon we’ll survive even this.
In sum, we have, in all likelihood, a split government, a recovering economy, enormous tail winds in terms of fiscal and monetary policy, and tons of cash looking for a home. Most of the value-suppressing pressures of post-election quagmires have disappeared (note: my bad on prognosticating that we’d emerge with hundreds of races unresolved and in violent dispute. FWIW, I’m delighted to have been wrong). These are pretty encouraging conditions for our Great/Once Great/Great Again/Not All That Great/Never Great markets.
Meantime, I’m calling this note early. I won’t declare myself a winner, because that’s not how I roll.
I leave with the advice look for buying opportunities.
And to cool it down.
Yes, somebody’s got the time, time. And somebody’s got the right. And all of you other people, are trying to use up the night. I already told you, though, I’m going ‘round the corner. However, rather than Miss Linda Lee, I’ll be looking for you.
And I expect you to be there when I arrive, because anything else would be unthinkable.
Let’s cool it down together, shall we?
TIMSHEL