Chief Investment Officer
Summary: We see a closer than expected race for the US presidential election which take place next week. Here we provide our long-term analysis, together with the recent headlines.
Our long term analysis: Close to zero impact next four years from who becomes President. Both Biden and Trump have zero willingness or ability to “heal” the US. The 2022 midterm election is already key. The Democratic young-and-left rising fast as voice, while MAGA movement remains in some form after a Trump loss. Either way, it all adds up to more social unrest. I see Biden as a Carter-like President. Full of good intentions after the disaster of President Nixon’s Watergate and the first oil crisis. But external factors (US losing 5G – AI race) will leave US in open discussion on finding its true values and roots.
Headlines Monday October 26th
Trading
We are going into the election with this portfolio (not advisory – only a model-based allocation)
We believe in hedging overall risk. We are long risk through equities, hedged with volatility, inflation and commodities. We have added crypto as per below.
The real digital revolution... A true hedge on any new US President? We think so...
This is portfolio allocation of 5% into long-term 100Y portfolio
We recommend 5% exposure to crypto through ETN is our base 100Y portfolio supported by recent break out to upside in pricing.
The end of the road
Emboldened by surging crude oil prices, Saudi Arabia makes waves on the international stage, as Crown Prince Mohammed bin Salman manages to create a World Champions League, after buying the UEFA Champion League franchise.
As the world embraces GLP-1 obesity wonder drugs, the people next in line to get a prescription stop caring about dieting and exercising, figuring that the drug will later solve all of their weight-related health problems.
With the US budget deficit spiraling above 10% of the GDP, the government is desperate to foster demand for US Treasuries. Under intense pressure from the White House, Congress makes income from government bonds tax-free.
After a criminal group deploys the most deceptive AI deepfake ever seen, generative AI becomes a national security threat. With public distrust soaring, governments crack down with harsh new laws, puncturing the AI hype.
To fix the divergence in the global trade and financial system, the largest deficit countries unite to negotiate new world trade terms. For surplus countries, the reset of the global economic model is a painful adjustment.
As discontent with Biden and Trump rises to fever pitch, Robert F. Kennedy Jr sees his support rising inexorably in the polls. On November 5, Kennedy wins the US presidential election, ushering in a new era in US politics.
Stepping up Japan's economic transformation in 2024, PM Kishida brings in a host of populist policies to boost domestic demand. As the GDP growth rate hits 7%, the BoJ is forced to abandons its yield curve control policy.
As people wake up to how little tax Europe’s billionaires are actually paying, the EU Commission implements a wealth tax of 2%. The tax sends shockwaves through Europe's luxury industry, with luxury giant LVMH plunging 40%.
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