investorpolitico

The US election are on November 3rd.

President Trump is at light disadvantage to Biden at the moment (less than the media would like you to believe), but the real game will be the US economy in September.

There are a few other factors to consider

-With Corona Virus probably it will be a Postal vote with issue of recounting and errors with the nominee not known until late November/ December (remember the 2000 elections Bush- Al Gore and the Florida mess.

-The issue of the popular vote and the electoral college (The system in the US is made like that as New York and California have enough votes to win the popular vote. As New York and California are traditionally pro Dem – Republican Presidents would never have a chance to be elected on a popular vote only basis).

While stats will tell you that the stock market has generally been better under a Democrat rule – it has been more a merit of history than a real bias.

Probably the effects of the new President will last just a few months.

A mess with the postal vote would translate a 5 to 10% correction.

A Republican win would bring a 2% upside – especially for defence, energy, big tech. More problematic for companies that rely on business with China.

A Democrat sweep will be a limited down side (5% to 10%) positive for green companies, materials. bad for big tech

A Democrat win, but with the Senate still in re hands will be the best option as would be good for big tech and big pharma.

China would be “enemy number one” for both sides but Chinese will be making more offers to Biden as they do not like the unpredictability of President trump.

What happened is terrible.

While it has been most likely it has been an accident provoked probably by poor practices and bribes, the story that is ammonium nitrate is a cover up.

• Ammonium nitrate explosions are yellow, not orange
• the building was not large enough to store the required quantity (Olympic size swimming pool)

Most likely it was a cargo of missile stored for delivery probably from Iran to the Syrian government.

Sources say that there was welding work going on.

The real first day of the stage 4 lock down are showing some terrible data.

I saw some modelling and it shows that infection will peak to 1,000 for the enxt 8 days.

What is most scary is that by the end of the lock down models show still a 300 people a day in mid September and a return to pre second wave by end of October (by the way consistent with the Sweden timeline with NO lockdown.

The hit on Victorian economy is AU$3 billion a week (vs A$1 billion a week in Stage 3).

Disruption in supply chain, increase in suicides, death by other illnesses (diabetes leading).

A government with clearly no strategy and no sense in what they are doing.

Also a constitutional issue for Australia – clearly the Federal government has no power to intervene in local matters even in emergency cases.

We are now in a second lockdown that will cripple Victoria for a number of years.

I am not here to criticise Dan Andrews (I already spoke about this) or be a Covid-19 denier.

I am just criticising the approach.

We are in a second lockdown and there is no assurance that at the end of this lockdown things will be better.

Actually it has been shown that almost all the cases are genomically traceable to the Quarantine Hotel Bungle – probably 2 to 4 people infected.

By 13 September you can be sure there will be a dozen of infected people not respecting the quarantine. And what…after 3 weeks we go back to lockdown and 80% of business fail?

Also, politics and media like to sensationalize.

Last year circa 160,000 Australian died of cancer and serious sicknesses. 3,855 from flue.

The Spanish flue (quite talked about by the media ) killed 0.3% of the Australian population (Covid-19 0.0008%)

There are a 20 excess suicides per week on the average and 700 extra death for diabetes (less prevention) – font ABS.

A sustainable approach would be a “Sweden Hard” –

No large gathering,

Compulsory masks

Real hefty fines (proportional to wealth status with ATO checks. So if you are in a lower ATO bracket you pay $2,000 if you are in the top marginal rate you pay $50,000+) and even jail for Covid-19 positive. Or to the extreme GPS bracelet tracking.

The issue is that all this is not sustainable and we cannot wait the vaccine to reopen the economy – the earliest widely available could be March 2021, if we are lucky.