The Election Day nightmare scenario that markets fear the most is actually the most likely possibility. Contrary to the perception of Trump voters, the nightmare scenario is not Secretary Clinton winning the presidency and contrary to the perception of Clinton voters, the nightmare scenario is not Mr. Trump winning the presidency. The nightmare scenario is that neither candidate will come up with a decisive win to slay the other.
Consider this. This is the first time in modern history where one candidate for the major party has flat out refused the idea of conceding the race. This is the first time in history where one candidate has claimed that the whole election is “rigged,” openly undermining the very foundations of U.S. democracy. Fully half the population agrees with him and is motivated to change the system by any means necessary.
Now add one more factor: The 2000 election and the Gore v. Bush U.S. Supreme Court ruling, which many legal scholars believe was the single worst judgment since the Dred Scott decision. In the year 2000, Mr. Gore meekly walked off the political stage in order to save U.S. democracy.
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| Could this be the most important election in American history? |
Expect no such repeat from the Clinton camp. Mr. Trump may have been the first to militarize politics in the United States, but Mrs. Clinton and her supporters are now just as willing to fight. At this point, both sides are so radicalized that anything but victory will be met with resistance both legal and maybe even physical.
So even a simple 270 vote majority in the Electoral College (and there are about half dozen ways how such a narrow result could be the outcome this year) will not be enough. Both sides will instantly challenge the results. And with the Supreme Court now standing at an even eight justices, SCOTUS may not provide any lasting resolution to the case.
Over the past century, the one unifying theme of the U.S. democracy has been the peaceful transition of power. Mr. Gore did it in 2000 with President Bush and Mr. Nixon did it in 1960 in a very tight and controversial race with President Kennedy.
No such common agreement appears to exist today. If nothing else, the 2016 election has shown that every acceptable norm of civil behavior has been abandoned amid partisan rancor. Whether we like to admit it or not, the country is fighting a silent Civil War and the anger is unlikely to subside unless one side racks up an overwhelming victory.
Amid such an undertow of turmoil, the markets are blissfully complacent. With final polls giving Mrs. Clinton a 2%-4% lead, risk assets have rallied, the dollar has been bid and equities put in their best rally in weeks yesterday. There is no doubt that investors prefer Mrs. Clinton — who is viewed as the candidate of continuity — to Mr. Trump – who is seen as a wildcard both politically and financially.
A Trump win will likely tank stocks, the U.S. dollar, the Mexican peso and the Canadian dollar. Over the past few days, both the Swiss officials and the Japanese, perhaps sensing the oncoming calamity, have announced that they will unequivocally intervene in the markets to keep the franc and the yen from appreciating too fast in case investors flock to those two popular safe harbor assets.
But I think all the pre-game maneuvering ignores the much bigger risk to investor assets and to the global economy in general. Markets hate uncertainty and so do businesses. If we find ourselves in the midst of a vicious protracted, political war of attrition by the end of the day, with neither side willing to concede and with the very fate of the Republic in doubt, investors will sell first and ask questions later.
Currencies, as always, will be the first to react to such developments. Long before the NYSE and NASDAQ officials even consider the opening of equity markets, the currency markets will trade at full strength and will absorb the implications of such a scenario. Despite the best efforts of the Swiss National Bank and the Bank of Japan, if we do find ourselves in a Constitutional crisis on November 9, the FX markets will overwhelm the officials as dollar dumping will be the one and only trade.
Oh, and one last thing.
Got Gold?
If November 8 brings no clear resolution, it won’t matter if you voted blue or red. The only thing that will matter is if you hold yellow in your portfolio.
Happy Trading,
Boris
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I think the biggest problem for us investors is going to be the flip flopping after the election; one hour up, one hour down, and on and on.
Hi Boris
What a really great night for the deplorables and what a great moment for gold.
I don’t recall Vice President Gore Walking meekly off the political stage in 2000.
After conceding the election, he rescinded his concession and took the case to the Supreme Court. Sort of like John Kerry “voted against before I voted for it”. Don’t try to rewrite history please.
Gore did his post election, unlike Trump who cried prior to the election. There is a significant difference between being defiant for the purpose of being defiant, and questioning results that should have been question. Gore was and still is civil. Trump isn’t even close and neither are his deplorable followers.
Gore walked away, in my mind he is not civil, but shrewd using his political influence to become extremely wealthy on fallacies. The public bought it, didn’t we?
George Soros’s ownership of the voting machines didn’t help in the last race and surely will not help now. The very idea that the SEIU has the service agreement on these machines doesn’t help either.
North West Penn. and North Eastern Ohio had some very weird stats, 110% of the electorate voted for Obama. Not one vote for Romney that is impossible!
US News & World Report on 11/20/12 debunks this rumour
gore was a whiny crybaby just like hitlery
Ah, yes,, Deplorable… you mean the people who still work for a living, instead of doing drugs and living off the State, on Welfare, with herds of illegitimate children running wild and making even more babies without benefit of marriage ?? Ha!
How does it feel to be so wrong. Or are you just so much smarter than the masses who elected your new leader. It could never be worse than the last 8 yrs.
Agree with Thomas Spear. Gore “walked meekly off the stage”?? He was a butt, years later chanting GWB “stole” that election. I don’t agree with much this author stated. He’s obviously in the tank with melancholy Dem overtones.
That could have been said for either side especially since the outcome depended on only a few Fl. votes that were disqualified and probably should not have been. . When the Florida supreme court intervened the Bush folks did not walk off. That the supreme court intervened in deciding a case that was for the state court to decide was the real outrage.
LIMIT the amount of days for campaining. It’s been about 300 days this year. Let the candidates pick the time they want to start. Make it a requirement for 100 days and they can use the days they chose.
As we have heard since antiquity: A NATION DIVIDED AGAINST ITSELF CANNOT STAND!
Lost interest in your opinions when you said that Trump said flat-out that he would not concede.
You need to do a little more research before they allow you to write under this heading again.
The article only shows the bias of the writer it’s OK to have an opinion but please don’t rewrite history . I
If you recall their even was even talk of doing away with the electoral college and go to the popular vote after th high court ruled So Gore did”nt go quietly into the night Joe
gore stomped his feet and whined the whole time
Without Trump we have lost our country.
All I can say is I work in aerospace manufacturing and Obama isn’t working for jobs or Healthcare or really much of anything else I don’t agree with everything he says but trump is my only glint of hope for my industry and manufacturing in general when will people understand that unless you are producing something all you’re doing is shuffling numbers around not actually adding value…. God help this country so many people will vote for the criminal that is the Clinton machine it’s a shame that people aren’t smart enough to understand that a subpoena means you have to show the government what they want not clean it up and show theme what you want to…. if there is an investigation going on there’s an 85-90 percent chance something is funny… I speak from experience I have been through the system and by my own will got out of it but the FBI doesnt investigate for no reason you might be smarter for now…. but what is done in the dark ALWAYS comes to light
I read that law regarding private email was not a retroactive law. Kind of like seatbelts mandatory in 1977 but somehow it came to light that during an accident in 1975 details of accident showed you were not using a seatbelt.
Retroactive means no law broken prior -at least that’s how most of the world does it
Boris, very clever how you left slanted your bias article.
speaking of al gore he is a traitor in my view by selling his litle tv station to aljezera who we all understand is owned by the qatar goverment no real friends of ours futhermore he is a hipocrite by talking about climate change and yet flying all around the world in his private jet oh dont forget wich he purchase with american blood in his hands from the extreme arabs he is no hero in my eyes or gentlemen
Wow! I have been reading Money and Markets for years now… but will be canceling my subscription due to the politically motivated commentary in this article.
I did not know that Money and Markets supported the Democrat Party. This year’s candidate cannot pass a criminal background check and has no business running for the highest office in this country! Such a disgrace… and she is not respected by world leaders.
Virginia’s Dem governor granted voting rights to 60,000 felons just in time for this election. Polling places are changing the vote for Trump to a vote for Clinton.
This is voter fraud and Trump has every right to vet the votes if he loses.
I agree with the comments of:
Henry Arnold
JcWorks
Thomas Spear
and the comment about George Soros owning the voting machines
The election has become so corrupt due to the Dems! Is this really the United States of America?
This writer writes today more than a Democrat stooge. Gore screamed foul like a banshee and his followers never did accept Bush. So after the SC made their decision Gore went after another scam and made himself a millionaire at the taxpayer’s expense. This country may well face a serious crisis thanks to the Left but the Wall Street crowd isn’t going to rush into buying gold quite yet. They’ll sell short and hunker down until they spell blood on the street. Then the buying will begin once again.
If Mr Nixon HAD been “unsportsmanlike” and challenged the CLEARLY fraudulent (images of ballot boxes floating in the Chicago River come to mind) 1960 results, we would most likely have been spared Vietnam, and the division in American society which began then, and which has festered into the current VERY serious threat to the future of our country.
Sounds like the author of this very slanted report prefers to “kick the can” a little further down the road to me.
This isn’t a fight between Dems and Repubs. This is a fight between saving the Constitution and the country verses fascist Communism as represented by Obama and Clinton. If you don’t see that, then you have been indoctrinated quite effectively by the liberals.
“Gore meekly walked off”???? Are you kidding me?! You are probably too young to remember (or refuse to remember) that the time after the Bush Gore election was a FIASCO! With swinging chads, hanging chads and all the other nonsense! And what about Mitt Romney not getting even ONE vote in many precincts? Not ONE!! That NEVER happens… Unless there’s fraud involved. Even Micky Mouse and Donald Duck get a few votes. GET RID of the Soros owned electronic voting machines and you will see a VERY different outcome on election days. In fact, if the BREXIT votes were cast on electronic voting machines I guarantee they’d still be part of the EU. Im very thankful that their citizens votes were counted correctly because if the globalist could have stole that one they would have. LOOK at how biased their media and their poles were for the remain crowd. The parallels between this election in the USA and the UK are very real, save for the fact that the UK had actual paper ballots that were much harder to manipulate.
George Soros’ dealings should be investigated, and reported publicly, if they are found to be illegal?
Irrespective of which party candidate said about rigged elections, as a rational minded person, do you seriously believe there is no voter fraud going on?
We have show our ID to enter a pub but not to vote? keeping aside fake id can be obtained, what does that indicate?
If Trump scores a win it will be good for the economy. Wall Street will force a quick resolution of the matter, they won’t allow it to drag on, because bottom line, I think Wall Street is comfortable is comfortable withTrump.
I think it’s time the conservatives fought back. The left has been steam rolling over the conservative movement for many years with fear and violence. I think it’s about time they got some of their own medicine.
A Trump Deplorable and Proud of it!
We are becoming an oligarchy, not unlike Mexico.
Everyone underestimated the general public frustration, even the ‘bought’ press. John Kerry was right -‘this little thing called the internet makes it difficult to govern” CORRECT, cant hoodwink the public any more, thats why the informed dont want big corrupt corporates and pro vaccine and controlling and corrupt pharmaceuticals and Democrates continue to enslave and controll. Trump with all his ills at least has the courage to recognise and stand up against the Deep State, with Congress and the Courts now all level thinking conservatives
OK America you now have a new President,Believe or not I like the guy,even if its just for change,theres your BO shouting for Clinton to carry on to finish what he started,after 8years,he could have built the Pyramids.Naw! its a good time for change.Lets get some honestly into the system and common sense.If I fly to Mexico,sneek over to America can I demand dual citizenship.Come on guys get the 2nd brain working
I have the advantage of knowing the result. Once again Boris you’ve got it wrong, just as you did with Brexit. Do you ever make correct predictions?
RHR.
The Clinton’s stole items from the White House upon leaving and their staff vandalized equipment. Gore and the other liberals continued their war against the will of the American people. I doubt President Obama will quietly go into retirement the way President Bush did. The author has a very short memory. That said their has been a quiet revolution against the lack of transparency, and favoritism toward special interests and pay to play corporate political favoritism. This country was founded on equality and fair play. Let’s keep it that way.
Yes- Mr. Bush slipped quietly into retirement, taking with him the $27.5 Miilion for the Bush library he was planning to build in Dallas. Oh- that $27.5 million was raised while he was in office, from undisclosed donors, and was just a small downpayment on the final cost. And please remember that he wasn’t too popular at the time, and Obama had a mandate After his election to get out of Iraq, as the US was so sick of it at that point. How soon we forget.
Imagine going to the grocery store, shopping to the point of having a full cart and checking out. Suddenly you realize you left your wallet, your cash, any method of payment at home.
The US is at the checkout lane with the wallet empty, the credit cards maxed out.No way to pay.
Despite all the promises of walls, deportation, destroying ISIS etc, if Donald Trump does not attack the National Debt with austerity measures, he will regret ever having considered running.
Some suggestions:
1. eliminate the Dept. of Education- not needed, never was
2. Eliminate the Dept of Commerce – th states do this anyway.
3. Drop the “staying on parents health care” to the age of 23—-get a job.
4. Require “work” for unemployment benefits, welfare etc.
5. Eliminate teacher tenure at every level.
6. Eliminate waste- 15 minutes in any office can save thousands
7. The lucky seven. Require 3 years of service to the country-paid. Not all must be military but service.
Check out the budget in 2 years.
As a Canadian I hope the US presidency has lots of checks and balances in place so a new president with more inflammatory remarks than the usual does not trigger WW3. Hopefully his advisers and staff will help him become a good and effective president and represent both democrats and republicans. The American Eagle needs both left wing and right wing to fly. So God bless both–it will need all the help it can get.