This guy sounds like me. I think my content has been hacked. I bet he's reading the Report.
BTW, this year's Trump is proposing a whole bunch of bad ideas. He's not just toxic but starting to suggest bad economic policies (like a full-scale trade war, overspending, blah blah blah).
Roth's wish for a divided Congress to stop Mr. Mean and Harris's agendas make a great deal of sense.
Donald Trump's 'policy soup' could be bad for the economy long-term, strategist says
Tony Roth, CIO of Wilmington Trust Investment Advisors, breaks down the best possible election outcomes for investors
Investors should hope for a divided Congress, strategist says
By Andy Mills
PublishedYesterday
Tony Roth, Chief Investment Officer for Wilmington Trust Investment Advisors spoke with Quartz Media.
ANDY MILLS (AM): The presidential election is less than two months away. What outcomes do you think investors should hope for?
TONY ROTH (TR): Well, I think they should hope for a divided Congress overall. And I think that one of the things that is very important is the fact that we have this tax bill, that package that had been passed under President Trump and now is up for renewal in a sense, which is to say it expires at the end of next year. And so in an environment where we have a divided Congress, there’s going to be, I think, the type of negotiating environment where a lot of those provisions could get extended.
But at the same time, there may be the ability to impose a bit more fiscal discipline on the federal government. And that is very important as an investor from the medium to long-term perspective, because we’re running deficits right now that are 7-8% of GDP on an annual basis, which is far greater than we’ve ever had before. Those are not sustainable.
So we really need to drive, try to get to a point if you’re a long-term investor, where on the one hand we can keep some of these tax cuts in place, but sort of thread the needle towards moving towards lower deficits and more fiscal responsibility.
AM: I haven’t seen the numbers lately. Do you know if there is a likelihood of a divided Congress?
TR: The Republicans are very likely to take the Senate. So if they’re able to get the seat in Montana, Senator Tester is having some problems, if you will, trailing in the polls there after a number of terms. So if the Republicans are able to get that particular seat and Senator Cruz holds onto his seat in Texas, which is one that is a little bit closer to the margin of error, if you will, then I think that the Republicans will take the Senate and the house is probably gonna go the way of whoever wins the general election. Usually what happens.
And so there is more of a probability that if former President Trump were to win, he would, you would see not a divided government because you’d see a Republican sweep. But as things stand right now, it’s very, very difficult to predict.
Of course, it seems like [Vice] President Harris has an edge.It seems as though with what happened recently in Nebraska, which is to say that she’s gonna win that one electoral vote in Omaha, it sort of feels that she’s got a lead in Wisconsin, pretty good lead in Wisconsin.
She’s a little bit ahead in Michigan, and Pennsylvania’s a tossup. She can win Pennsylvania. That may be it right there. So the most likely outcome is probably a Harris win with a Republican Senate. But we’ll see.
AM: Let’s say that there’s a Republican sweep. What do you think happens to the markets? How should investors prepare for that kind of thing?
TR: Yeah, I think a Trump outcome, even with a divided Congress either way is probably the most uncertain outcome. And the reason is when we think about the election and the impact of the election on the markets, it’s just three layers of uncertainty. You have election uncertainty, which is who’s gonna win and what’s the composition of Congress.
But then you have what I call “candidate uncertainty” and “policy uncertainty”. And candidate uncertainty consists of the idea that a candidate may do something very different than what they talked about and that be maybe because they change tack or maybe because they can’t actually do legally what they’re trying to do and they don’t have the votes or so on and so forth.
And so in the case of a former President Trump outcome, another Trump administration really unclear the degree to which he’d really raised tariffs, really unclear to which the degree to which he would actually lower taxes. And then you have policy uncertainty, which is to say even if you were to do those things to a fairly significant degree, what impact does that really have on the economy and the markets?
I think that a lot of this policy soup, if you will, that he’s coming up with would be pretty negative for the economy in the long term because it would result in significantly higher deficits. But it may be good for the markets in the short term. It may be very generative in terms of economic activity in the short term and then therefore help markets even though the long term impact would be very negative.
So I think that if we have an outcome where we wake up on the day after the election and Trump seems to have won regardless of the composition of Congress, I think a lot of investors are gonna be very uncertain as to how the market’s gonna open and how it’s gonna trade in the coming days. So that’ll be very interesting to follow.
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