Trump or Harris? Who’s Better For The Markets

“How can you read that s**t?” he spat.

It’s early Thursday morning and I’m sitting near the front window of my favourite café reading the Telegraph.

God forbid!

It’s one of the ironies of living amongst inner city types.

The same people who champion inclusion, diversity and equality often have little tolerance for views different to theirs.

They’re usually the same people who point the finger at corporates not paying enough tax while renting their spare rooms at home and lining their pockets with black money…and then justifying it.

Hypocrites.

Unbeknown to the boofhead standing in front of me, whenever I read one paper (Tele or SMH), I always read the other to equilibrate any bias, especially around politics and finance.

In my opinion, reading one paper is the same as only listening to one child after two children have ripped into each other.

The upcoming US election is a good example.

There’s a view amongst readers that Harris and Trump will be good or bad for the markets depending on what paper you read.

But instead of taking sides with your favourite media outlet, how about we get a third opinion, history.

In 2001, when George Bush (Republican) won the election, the stock market was in the middle of a massive three year correction and eventually the economy slid into recession.

And then in 2008, during the Global Financial Crisis (GFC), Barak Obama (Democrat) was voted to power and the stock market dropped 54%.

In other words, despite their appointments to office, neither side (Republicans or Democrats) made any difference to a stock market that was already primed for a hard landing.

This market and election is no different.

For example, one of the conspiracy theories floating around at the moment is if Trump wins he will cut taxes and the markets will rocket.

Oh, really!

If either party cuts taxes, this is what will happen…

1. Disposable incomes will increase which will immediately fan inflation.
2. A drop in tax revenue will mean less government revenue to fund their growing debt.

Which brings me to the most important point…

The US is currently facing debt dynamics that are so dire, they’re unable to service their existing debt levels.

It’s the same as not having enough income to service your mortgage.

Consequently, the US only has two options…

They either cut spending, which would contract their economy. Or they print more money which would increase their growing debt pile and make their current situation worse.

Sadly, I don’t think Trump or Harris will make the difference voters are hoping for.

As Einstein said, “No problem can be solved from the same level of consciousness that created it.”

Have a great weekend!

Adam