I have noted repeatedly that Michael Hartnett at BofA, the most famous asset strategist on the planet, has a blind spot when it comes to geopolitics.
Today we get another dose.
Midterms not “regime change” election, e.g. Thatcher/Reagan in 1980 = end of inflation/start of bond bull, BREXIT/Trump in 2016 = end of globalization = start of commodity bull; midterms unlikely to change trajectory of US government spending; 2020s decade of political populism as MAGA (Reform party in UK) and Democratic Socialists of America (Greens in UK) culmination of post-GFC Tea Party and Occupy Wall St insurgents; populists (right or left) spend to stay popular… why 2020s decade of fiscal excess, nominal GDP boom (past six years up 63% in US from $20tn to $32tn) and “Anything But Bonds” strategic asset allocations; investors not fearful of midterms saying POTUS governs through Executive Orders not Congress (277 thus far, on track for most since Truman), and say DEM sweep unlikely given tough Senate “map”; asked most likely outcome from midterms in August BofA Fund Manager Survey (see report), 47% said GOP Senate & DEM House, 23% said DEM sweep, 9% said GOP sweep/maintains control of Congress (current GOP Senate majority is 53-47, in House 218-212).
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