Is It Too Early To Think About The 2020 Election?
It's not too early to think about the 2020 election. It'll be here in a bit less than a year. Seems like only yesterday when Trump was elected, fooling most of the pollsters and political talking heads. Fooled those who predicted a stock market cataclysm too.
But what about this go-round? Well, assuming Trump runs, should we expect a replay of 2016? Could be. Here's why:
First, consider the potential opposition. While some Democrat or other will likely have a committed contingent of supporters, do the names on the current roster rouse you enough to throw Trump out and give them a shot? Even if one or two do (Biden? Warren?) have they really captured and energized a broad swath of America? I can't answer these questions, but I do think that, at best, the opposition will be more or less neutral factor. The election may very well be Trump's to win or lose.
Whoever opposes Trump - and that now includes Bloomberg - we can expect the onslaught of drama from his opponents that accompanied Trump's last election. Most if not all of it will be overblown if not downright false. Among the claims that electing Trump will end the if not the world at least America as we all know and love it, will be the Trade War. We've been hearing this and so far its effects have been muted - at least in comparison to the predictions that come and go daily. If that pattern continues, even the Trade War won't kill Trump's re-elction bid.
What about immigration? I'm willing to concede that there may be a few out there who sincerely believe Trump and those who oppose illegal immigration are opposed to all immigrants. But on what do they base this? People they personally know who don't like foreigners? Are there really that many of those? My experience is that it's doubtful. Most of the folks I know are descended from immigrants. We socialize and do business with immigrants and descendants or immigrants. It all seems to work OK. I suspect a lot of Americans may be in this boat.
If you oppose illegal immigration, don't feel bad. Respect for the rule of law remains one of the primary pillars of our American Republic - such as it is these days. If you don't like immigrants or any foreigners, wherever you are, stay there and leave the rest of us to manage the changing face of America as we did before the illegals swamped our shores. I live in an area whose ethnic make-up has changed over the years. Because most people here want to keep our neighborhood safe and liveable, we treat each other with respect. We get along. We may or may not want to have a drink together, but we live and let live for sure. What's wrong with that?
What about the Impeachment proceedings? There was some momentum building for a while - until the hearings the Dems held went public. Momentum's cooled.
Bloomberg's making noises about Trump being an "existential" threat to our country - whatever that means. Don't be surprised if a slug of voters latch on to that one. It's vague enough to circumvent and reasonable debate. It's hard to oppose something vague like that. But how big a contingent will that be? Will it simply be a chunk of those who simply - for whatever reason - hate Trump?
So if the Trade War, Immigration, Impeachment, and Bloomberg's "existential threat" theme don't push Trump out, is there anything that could positively keep him in? Sure. The economy and the stock market.
Those two generally swim together. The thing to keep an eye on is whether we have a recession before the election. If we do, there's a good chance Trump will have to go. That's just a typical pattern in past elections. And while we all know a recession will come sooner or later, one thing that could make it sooner would be a bear market in stocks.
Lot's of people are apparently still walking on eggshells when it comes to stocks. If this stock market slips into bear territory before the election, it will have to do so in despite it never having generated a typical third or final stage of bull markets: mania. We haven't really had that manic phase. While I'd typically agree that without a true "Melt Up" in stocks, we're likely not going to get a bear, I do admit to having to hedge that a bit because of the dysfunctional economy and markets we've had since the Great Recession, engineered by the actions of the Fed and the rest of the world's central banks. Maybe they've thrown off the common gauges we use to feel our way around economic cycles, especially with their negative interest rates. The world, having never had negative interest rates, may well be a different place than it was before. We'll have to wait and see.
What about the "inverted yield curve"? Well, it had inverted pretty decisively. And while that's reversed a bit as bonds continue to correct their recent powerfully bullish actions, that doesn't necessarily "negate" the inversion we had a few months ago. But while this may have indeed been an accurate signal of a coming recession, it's an early signal. Recessions don't happen for a while after the signal is given. What's a while? A good span would be 6 months - 2 years. Remember, though, that even if it's on the short side, it takes many months of revision of economic statistics before there's a definitive statement that "We're in recession." Given the timing of the election - less than 12 months away - we'd have to slip into recession pretty quickly for it to have a negative impact on Trump.
Now, none of this may pan out. But it's one way of looking at what to expect in November 2020.
But what about this go-round? Well, assuming Trump runs, should we expect a replay of 2016? Could be. Here's why:
First, consider the potential opposition. While some Democrat or other will likely have a committed contingent of supporters, do the names on the current roster rouse you enough to throw Trump out and give them a shot? Even if one or two do (Biden? Warren?) have they really captured and energized a broad swath of America? I can't answer these questions, but I do think that, at best, the opposition will be more or less neutral factor. The election may very well be Trump's to win or lose.
Whoever opposes Trump - and that now includes Bloomberg - we can expect the onslaught of drama from his opponents that accompanied Trump's last election. Most if not all of it will be overblown if not downright false. Among the claims that electing Trump will end the if not the world at least America as we all know and love it, will be the Trade War. We've been hearing this and so far its effects have been muted - at least in comparison to the predictions that come and go daily. If that pattern continues, even the Trade War won't kill Trump's re-elction bid.
What about immigration? I'm willing to concede that there may be a few out there who sincerely believe Trump and those who oppose illegal immigration are opposed to all immigrants. But on what do they base this? People they personally know who don't like foreigners? Are there really that many of those? My experience is that it's doubtful. Most of the folks I know are descended from immigrants. We socialize and do business with immigrants and descendants or immigrants. It all seems to work OK. I suspect a lot of Americans may be in this boat.
If you oppose illegal immigration, don't feel bad. Respect for the rule of law remains one of the primary pillars of our American Republic - such as it is these days. If you don't like immigrants or any foreigners, wherever you are, stay there and leave the rest of us to manage the changing face of America as we did before the illegals swamped our shores. I live in an area whose ethnic make-up has changed over the years. Because most people here want to keep our neighborhood safe and liveable, we treat each other with respect. We get along. We may or may not want to have a drink together, but we live and let live for sure. What's wrong with that?
What about the Impeachment proceedings? There was some momentum building for a while - until the hearings the Dems held went public. Momentum's cooled.
Bloomberg's making noises about Trump being an "existential" threat to our country - whatever that means. Don't be surprised if a slug of voters latch on to that one. It's vague enough to circumvent and reasonable debate. It's hard to oppose something vague like that. But how big a contingent will that be? Will it simply be a chunk of those who simply - for whatever reason - hate Trump?
So if the Trade War, Immigration, Impeachment, and Bloomberg's "existential threat" theme don't push Trump out, is there anything that could positively keep him in? Sure. The economy and the stock market.
Those two generally swim together. The thing to keep an eye on is whether we have a recession before the election. If we do, there's a good chance Trump will have to go. That's just a typical pattern in past elections. And while we all know a recession will come sooner or later, one thing that could make it sooner would be a bear market in stocks.
Lot's of people are apparently still walking on eggshells when it comes to stocks. If this stock market slips into bear territory before the election, it will have to do so in despite it never having generated a typical third or final stage of bull markets: mania. We haven't really had that manic phase. While I'd typically agree that without a true "Melt Up" in stocks, we're likely not going to get a bear, I do admit to having to hedge that a bit because of the dysfunctional economy and markets we've had since the Great Recession, engineered by the actions of the Fed and the rest of the world's central banks. Maybe they've thrown off the common gauges we use to feel our way around economic cycles, especially with their negative interest rates. The world, having never had negative interest rates, may well be a different place than it was before. We'll have to wait and see.
What about the "inverted yield curve"? Well, it had inverted pretty decisively. And while that's reversed a bit as bonds continue to correct their recent powerfully bullish actions, that doesn't necessarily "negate" the inversion we had a few months ago. But while this may have indeed been an accurate signal of a coming recession, it's an early signal. Recessions don't happen for a while after the signal is given. What's a while? A good span would be 6 months - 2 years. Remember, though, that even if it's on the short side, it takes many months of revision of economic statistics before there's a definitive statement that "We're in recession." Given the timing of the election - less than 12 months away - we'd have to slip into recession pretty quickly for it to have a negative impact on Trump.
Now, none of this may pan out. But it's one way of looking at what to expect in November 2020.
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