Clive Hale

Clive has been involved with the investment industry for over 40 years as a fund manager, funds researcher, non-exec director, investment co

Nov 6, 2016
2 min read
The Un-Presidential Election – November 6th 2016

The Un-Presidential election campaign is drawing to, what one would hope, is a blessed close. However, the parallels with the UK’s EU referendum are in many ways similar; not least of all the certainty that the losing candidate will not accept the outcome and that the post-election mood will be as fraught as on the campaign trail; each side’s legal teams are gearing up to dispute the result as we “speak”.

The polls look to be as unreliable too, although the gap has closed to within the normal tolerance for error, so it’s now anyone’s race. Unless of course you are part of the main stream media, the “Establishment” or Large Corporate world in which case Hilary is your darling and Trump doesn’t stand a chance. Again, more shades of the UK Remain campaign that branded anyone with a proclivity to leave as a suitable case for treatment, along with dire warnings (threats) about the economy, immigration and national security. You could be fooled into thinking that we have exported a trend to the US for a change, until you remember that Obama flew into London and told us in no uncertain terms that the “special relationship” would be under severe strain should we be foolish enough to vote “the wrong way”. The bookies also seem to be hoping to avoid a re-run of June 23rd they are offering Hillary at 1-3 on and Donald at 3-1 against – a 75% chance against 25% for those of you not familiar with the patois in the betting ring.

An interesting late twist, at least for students of Murdochology, is that the Dirty Digger appears to have changed his allegiance from The Hillbillaries to the Despicable Don. His ability to “back the right horse” has been in evidence in the UK with Murdoch “journals” swinging the vote for John Major in 1992. “It was The Sun wot won it”, boasted Britain’s highest-selling tabloid newspaper immediately after the result; and, in his resignation speech, Neil Kinnock said that “the Conservative-supporting press has enabled the Conservative Party to win yet again”.

The fact that Kinnock blamed the press and not himself for an inept campaign that ended with him making a “triumphal” entry to a meeting in Sheffield on the eve of the election, suggests that the press effect was not as great as the tabloid press thought, but certainly enough to swing a goodly number of voters in marginal Labour held constituencies. In 1997 the Murdoch press was firmly behind Blair as the Digger correctly sensed that the Tory hold on UK politics was slipping away and he needed a new champion to help further his “cause”.

Changing political affiliations is then a matter of “good” business practice and with trust in Clinton’s ability to tell the truth about pretty much anything at rock bottom there is a sense that even if she wins she will be dogged by investigations into her nefarious past at every turn. Being associated with a President that may be on the road to impeachment even before election day is a strategy to be avoided. As Trump’s agenda is pretty much unknown, being in the same camp to “help” determine policy is a much better idea.

For the US voter, it’s very much like a scene out of the Matrix, where Neo is asked by Morpheus to choose between the blue or the red pill. The blue pill maintains the status quo, which is a comfortable place to be and he goes back into the Matrix; the red pill is a leap into the unknown and a battle to change the system. Hilary would be more of the same; much more. More government interference, more spending, both healthcare and military and further erosion of privacy by stealth. As George Carlin irreverently opined, “I love this country for the freedoms it used to have.”

Trump has promised much, but plans to deliver are pretty thin on the ground. He is unlikely to have the support of both the Senate and Congress, even assuming any Republicans would vote for him; such is the division he has created within the GOP. His suggestion that future campaign contributions would be severely restricted and that former government officials would be banned from taking high paying sinecures with big business after leaving office, currently one of the most lucrative gravy trains in Washington, is even less likely to enamour him to either side.

The choice between a President that no one trusts and one with suspect personality traits is unpalatable to say the least. The issue though is more fundamental than that and was spelled out by George Orwell, whose classic book, 1984, is getting more like the real thing every day. He said that, “A people that elect corrupt politicians, imposters, thieves and traitors are not victims… but accomplices”. Don’t take either pill…

How will the markets react? With great gusto, but in which direction? FTSE and the S&P spent last week going South and are down 6% and 5% respectively since the recent all-time highs. A Clinton in the White House, with a decent majority, and a relief rally is baked in. Trump would almost certainly have the opposite effect. What neither candidate has tackled is the debt problem. Clinton will spend more and print more and Trump has said he knows how to deal with debt from personal experience. He knows what bankruptcy means, but reneging on US Treasuries? Really? More spending and the initial reaction would be for the markets to carry onwards and upwards, but only too soon they will work out that the new President has no principles, no idea and no clothes…

Clive Hale –The View from the Bridge – November 6th 2016