Speaker 1Welcome to the Saxo Market Call. Before we get started, it's important we emphasize that the views and opinions expressed in this podcast are those of the host and guests and do not constitute investment advice or recommendations. All information provided is for educational and entertainment purposes only. Hey everyone, this is A Bit Unusual. I'm doing a last minute podcast here just before the U.S. elections because I was afraid after listening to a long-form podcast with Grant Williams that I should have picked up on by now that it was a little bit of an eye-opener for me and just especially in the sense of confidence levels going into this election. I think I've been maybe a bit too lazy in going with the flow, the flow being these aggregate presidential poll ratings, where those are, and the margin of victory that is expected. I'm going to be talking about the flow of the U.S. elections and what's expected for the Democrats in both the Senate and the House. Now, that's not to say that it can't happen. I'm just saying my conviction level is going out the window on what is going to happen at this election based on this podcast that I listened to that really delves into a lot of the issues with polling. And let's be honest, a lot of the sense of what is going to happen at this election is based on polling. This person, it is a Marvin Barth with, I don't know who he's with. It might be his own outfit. Again, on the Grant Williams podcast, I will be talking about we'll put the link in the podcast episode description. So he talks about the fact that these polls simply do not measure a very important contingent of the voting public. And these are people that are so-called low-trust people, the people that have been very decisive for the elections, low-trust in terms of trusting government. So that's the important qualifier there and could be decisive once again. And that he says that when he looks at the polls, and the sample of those people that are being polled, that it looks like samples of the population that were involved in very heavy misses in the samples from previous elections. I think there was something about 2014 where the polls are very much off, also in favor of the Democrats. I'm still not willing to go whole hog into this view of things that he's promoting, but he certainly talks a good case that the Republican showing should be, according to him, stronger than expected. And if it was, I mean, the reverberations across the board, if the Republicans put in a showing that is very strong, especially if they maintain the House and the Senate, I can imagine, okay, the Senate, we were off a percent, 2% in the polls. They maintain the Senate. The Democrats take the House by a smaller margin than expected. That's within my sort of range of possible outcomes before listening to this podcast. But if they take both, I mean, we're talking about an incredibly rare event. Actually, it's only happened three times in midterms since 1934 that the president's party has increased their representation in the House. 1934, people saying, yes, thank you to the New Deal. Makes some sense. 1998, the public saying, stop focusing on the bedroom stuff with Clinton. Let's get on to more important issues. And then in 02, it was a patriotism trade post 9-11 supporting the president and the sort of war on terror. So this would be historic stuff if it is maintained. If there is some deeper sense when people go to the polls that they are pro, they're willing to ignore all the stuff that is getting such negative play against Trump, the corruption, the silly gilded White House, his behavior, all these things with schemes for enriching himself, et cetera, that they like the underlying populist agenda of very clear message on anti-immigration. Let's be honest, that's something that Trump has delivered on, if that is your belief, especially the culture war signaling that they feel that these issues rank very high relative to pocketbook issues that have ranked against Trump so highly in the polls, including especially the cost of living stuff. And I can imagine that Trump's, you know, or if the polling has overrepresented Democratic voices, that this issue of corruption rising to the top is because there's a unified voice worried about corruption among Democratic voters that just shows up highly on top concerns, whereas I think affordability probably is something that shows up more broadly. But it would somehow speak to these issues, especially the whole, at least the messaging around tariffs versus the reality of how much he's delivered on this in terms of bringing industry back home. So they support those things. The full agenda of the rest of the world is screwing us over and we're doing a power play on the rest of the world. We're going to bring our industry home. Whether we're actually delivering on that secondary, that's what we stand for. We stand for anti-immigration and we stand for these culture issues. There's some sort of antitrust, quiet majority, moral majority, whatever you want to call it out there that is going to show up in these polls and skew this vote far more than anything is being picked up on. And then just imagine the reverberations across markets, not just markets really, but just nearly everything if that actually happens here. So first of all, the whole polling industry, just toss it out the window. And it's kind of interesting that Barth says that the polling industry, just toss it out the window. And it's kind of interesting that Barth says that the they might do something like, well, we're underrepresenting this certain minority among men. So they'll try to make sure that they ask 50 of this person, of this type of person rather than 10. But those 50 that actually bothered to respond to the poll are just saying they're people that respond to polls. They have some level of trust that people that don't respond to polls don't have. So they won't respond to the non-trusters. And he's even humble enough, this guy Barth who's talking about, look, this isn't even a statistically represented. I just, I'm looking at this with a framework that sort of rhymes with what I've seen in the past. So I just felt like it was my duty to the podcast listeners. Super sorry if you haven't gotten this in time. I'm not, I'm certainly hoping you're not relying on me as a main source of intelligence on the odds of the election. But I think I've been a little bit too complacent in understanding what might be going on here. And again, I'll be happy to, not happy to, but I feel that the need to reduce the level of conviction and admit that after listening to this, it feels like to me that I'm not sure what I'm standing on solid ground in my understanding of the situation. You would think there would be some kind of potentially a treasury market sell-off. I think the treasury and the Fed have some enormous things cooking for the US treasury market and restructuring that along the lines of today's podcasts from earlier. So there could be a treasury sell-off. Oh, they're going to come up with another crazy fiscal program that's going to further erode the fiscal credibility and it risks higher rates. I'm not sure I would buy into that or sort of buy into that logic, I should say, with that reaction. There'll probably be some kind of a profound comeback in AI and tech, you would think, because, hey, it's free reign for that whole space. And then maybe the industrial side of the economy as well. But- But those are the initial reactions. The dollar might come in for a initial poke higher, although I think the longer term trajectory could be something else. Don't really want to think about the market reaction. I just want to prep listeners, if they're using me at all, which I hope they're not too much, relying on my political analysis to the idea that these midterm odds are maybe somewhere else than I have been sort of assuming they are coming into this election. And think about the consequences for the reliability. How people feel like they understand reality when the consensus seems to be so strong from the betting sites to the press to everything about Trump getting administered this drubbing, if he does not get administered that drubbing. And I say if, because I'm just still want to keep all options open. It could just be this massive swing in the polls that we've seen so many times in the midterms. But oh my goodness, if it is not, it says a whole lot. And I think the number one thing it would say, besides an endorsement of the- I think the number one thing it would say, besides an endorsement of the- Democratic Party needs to go back to the drawing board. What an absolutely profound rejection of that party when these polls are saying what they're saying going into this election. Those apparently with the high trust, they respond to polls, that is. So please have a listen to the podcast if you want to squeeze something in last minute. Thank you so much for joining us. We'll see you next time. That is a massive deal. I would say an awful lot. So what it's worth, have a listen to the podcast if you have time. And yeah, I'll be up quite early tomorrow trying to sift through the results to see where this thing is going. Stay very careful out there and we'll be back soon with the next Saxo Market Call. This has been the Saxo Market Call podcast. Thanks for joining today's episode. We're always happy for your feedback and questions all kinds. To reach out, you can drop us an email at marketcallatsaxobank.com. That's marketcallatsaxobank.com. Saxo, serious trading worldwide. I'll see you next time.
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