Gains Pains & Capital

As I outlined in yesterday’s article, the odds are relatively high that President Trump will secure a second term courtesy of how the legal system handles contested elections.

With that in mind, we need to ask, “what is the BIG PICTURE outcome for the markets if Trump wins?”

I believe that if President Trump manages to secure a second Presidential term, the stock market will go into an ENORMOUS bubble.

Why?

Because President Trump is OBSESSED with the stock market. He’s mentioned it 54 times on his twitter account this year alone. That’s more than once a week!

Why this obsession?

Because the President knows it’s a simple measure of wealth that appeals to the average person. Talking about boosting incomes or reducing wage disparities sounds nice, but these are vague concepts. Saying “stocks are at record highs!” is a specific measure that anyone can understand and interpret to mean “people are getting rich.”

The President, for all his flaws, understands sales. And by talking about stocks non-stop, he’s “selling” Americans on the idea that he is creating wealth, even if the reality is that the market is rising because the Fed is providing record amounts of liquidity.

Speaking of the Fed, President Trump now effectively decides Fed policy due to his constant bullying via his very same twitter account (and its 87 million followers).

Case in point, take note of how the President hounded the Federal Reserve to ease monetary conditions non-stop throughout 2018. The below tweets are two of literally dozens in which the President harangued the Fed to ease conditions.

When the Fed was slow to act, the President even want so far as the float the idea of FIRING Fed Chair Jerome Powell, leaking the plan to Bloomberg in June of 2018.

I do not expect any of the above issues to change during a Trump second term. If anything, I would expect President Trump’s obsession with stocks to be ever greater. And this means even more pressure on the Fed to create a bubble

Again, I’m NOT saying this is a good thing, nor am I saying I like what the President does. I’m simply pointing out how he sees the stock market and what this means for his attitude towards the ultimate driver of stocks: Fed liquidity.

So… if President Trump does win a second term. What would his obsession with stocks mean price wise?

Well, the Fed has cut interest rates to ZERO and is now running QE programs equal to $125 billion per month. Moreover, Fed Chair Jerome Powell has stated that the Fed will not attempt to normalize Fed policy until the U.S. economy has experienced a full recovery to levels that existed prior to the COVID-19 pandemic. And the Fed as a whole stated that it will keep interest rates at ZERO through 2023.

Yes, 2023.

The last time the Fed held rates at ZERO for years while running aggressive QE programs was from 2008-2015. During that time, the S&P 500 nearly TRIPLED.

Currently stocks are up 50% from the lows March. If the S&P 500 were to follow a similar move, we’d see the mother of all bubbles with the S&P 500 rising to over 6,000 over the next five years.

And if things REALLY get out of control, as they did in the late ‘90s, we could see the S&P 500 running to 10,000 or higher. This sounds ridiculous, but this kind of move has happened before. Indeed, the NASDAQ rose over 140% in just four years during Bill Clinton’s second term as President.

With the S&P 500 around 3,500 today, this would mean a run to 8,400 by the end of 2024.

Again, this sounds ridiculous, but all bubbles do. And we know this President more than any other in the last 50 years is obsessed with stocks. Combine this with a Federal Reserve that is already engaged in the most aggressive QE program in history and suddenly the S&P 500 at 8,000 in four years doesn’t seem so ridiculous.

With that in mind, we recently published a special report titled, The MAGA Portfolio: Five Investments That Will Make Fortunes During Trump’s Second Term.

In it, we detail five HIGH OCTANE investments that are primed to EXPLODE higher when President Trump wins a second term.

Each one of these investments is in a unique position to profit from the combination of Trump economic reforms and Fed monetary easing, combining high growth opportunities with extreme profitability.

We are offering this report exclusively to subscribers of our e-letter Gains Pains & Capital. To pick up your copy please swing by:

https://phoenixcapitalmarketing.com/MAGA.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

As I outlined in yesterday’s article, the odds are relatively high that President Trump will secure a second term courtesy of how the legal system handles contested elections.

With that in mind, we need to ask, “what is the BIG PICTURE outcome for the markets if Trump wins?”

I believe that if President Trump manages to secure a second Presidential term, the stock market will go into an ENORMOUS bubble.

Why?

Because President Trump is OBSESSED with the stock market. He’s mentioned it 54 times on his twitter account this year alone. That’s more than once a week!

Why this obsession?

Because the President knows it’s a simple measure of wealth that appeals to the average person. Talking about boosting incomes or reducing wage disparities sounds nice, but these are vague concepts. Saying “stocks are at record highs!” is a specific measure that anyone can understand and interpret to mean “people are getting rich.”

The President, for all his flaws, understands sales. And by talking about stocks non-stop, he’s “selling” Americans on the idea that he is creating wealth, even if the reality is that the market is rising because the Fed is providing record amounts of liquidity.

Speaking of the Fed, President Trump now effectively decides Fed policy due to his constant bullying via his very same twitter account (and its 87 million followers).

Case in point, take note of how the President hounded the Federal Reserve to ease monetary conditions non-stop throughout 2018. The below tweets are two of literally dozens in which the President harangued the Fed to ease conditions.

When the Fed was slow to act, the President even want so far as the float the idea of FIRING Fed Chair Jerome Powell, leaking the plan to Bloomberg in June of 2018.

I do not expect any of the above issues to change during a Trump second term. If anything, I would expect President Trump’s obsession with stocks to be ever greater. And this means even more pressure on the Fed to create a bubble

Again, I’m NOT saying this is a good thing, nor am I saying I like what the President does. I’m simply pointing out how he sees the stock market and what this means for his attitude towards the ultimate driver of stocks: Fed liquidity.

So… if President Trump does win a second term. What would his obsession with stocks mean price wise?

Well, the Fed has cut interest rates to ZERO and is now running QE programs equal to $125 billion per month. Moreover, Fed Chair Jerome Powell has stated that the Fed will not attempt to normalize Fed policy until the U.S. economy has experienced a full recovery to levels that existed prior to the COVID-19 pandemic. And the Fed as a whole stated that it will keep interest rates at ZERO through 2023.

Yes, 2023.

The last time the Fed held rates at ZERO for years while running aggressive QE programs was from 2008-2015. During that time, the S&P 500 nearly TRIPLED.

Currently stocks are up 50% from the lows March. If the S&P 500 were to follow a similar move, we’d see the mother of all bubbles with the S&P 500 rising to over 6,000 over the next five years.

And if things REALLY get out of control, as they did in the late ‘90s, we could see the S&P 500 running to 10,000 or higher. This sounds ridiculous, but this kind of move has happened before. Indeed, the NASDAQ rose over 140% in just four years during Bill Clinton’s second term as President.

With the S&P 500 around 3,500 today, this would mean a run to 8,400 by the end of 2024.

Again, this sounds ridiculous, but all bubbles do. And we know this President more than any other in the last 50 years is obsessed with stocks. Combine this with a Federal Reserve that is already engaged in the most aggressive QE program in history and suddenly the S&P 500 at 8,000 in four years doesn’t seem so ridiculous.

With that in mind, we recently published a special report titled, The MAGA Portfolio: Five Investments That Will Make Fortunes During Trump’s Second Term.

In it, we detail five HIGH OCTANE investments that are primed to EXPLODE higher when President Trump wins a second term.

Each one of these investments is in a unique position to profit from the combination of Trump economic reforms and Fed monetary easing, combining high growth opportunities with extreme profitability.

We are offering this report exclusively to subscribers of our e-letter Gains Pains & Capital. To pick up your copy please swing by:

https://phoenixcapitalmarketing.com/MAGA.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

I want to stress in advance, that I DO NOT want to be political in this briefing. I am not saying I LIKE any of the recent developments. And I’m certainly NOT saying I want a particular candidate to win.

All I am saying is that the election is a mess and from what I can tell, no one in the media is actually outlining what’s to come based on the law. Instead I’m seeing a lot of political opinion, being presented as fact, when it isn’t.

The media wants you to believe the election is over.

By law, it isn’t.

Unless a candidate concedes, the election remains in play until December 14^th when states cast their electoral college votes.

So, unless President Trump concedes between now and then, Joe Biden hasn’t won anything, no matter what the media tells you. Indeed, the media has no say in this, anymore than they can decide what color the sky is; they’re simply trying to get you angry so you’ll continue to watch their awful shows so they can sell your eyeballs to advertisers.

With that in mind,  we need to take a step back and assess how this election is likely to play out based on the LAW, not public opinion or media propaganda.

Based on the law, it is highly possible and in fact probable that Donald Trump will end up winning the 2020 Presidential election.

Why?

Because the election is now in the courts. And the courts have a clear precedent for how contested elections play out.

When the courts get involved in an election, it becomes an issue of evidence. Specifically, what a given court decides is compelling versus non-compelling evidence, and how the court chooses to address the issue of voter fraud if indeed there is compelling evidence.

For instance, if President Trump’s legal team goes to court and says, “we want to have a vote audit in Michigan because there was voter fraud” the first thing the court will ask them is, “what evidence do you have to support this claim?”

If the President Trump’s legal team’s answer is “we saw some numbers that looked suspicious,” the court controls its urge to laugh, throws out the case, and that’s that.

However, if the President’s legal team responds, “we have sworn affidavits from 50 witnesses, video evidence, as well as three whistleblowers” then it’s a completely different story.

Once evidence of fraud is introduced to the courts via a lawsuit, the court, NOT the voters and certainly NOT the media, is in charge of the election.

The courts can demand a vote audit of every single vote counted in an election. If, during the vote audit, actual fraud is discovered, the court can rule that those votes are no longer valid, the formal vote counts can change, and it is possible that a given state ends up declaring a different winner.

Even if fraud is not discovered by the audits, but there is a particular problem with vote cards (the wrong type of ink was used, the hole punch didn’t go all the way through the ballot as was the case in Florida in 2000, etc.), the courts can deem those problematic votes as illegitimate.

This again can mean the formal vote counts can change, and it is possible that a given state ends up declaring a different winner.

This process is now underway in Georgia, Pennsylvania, Nevada, Wisconsin, Michigan, and Arizona.

Any one of those states could see Biden end up losing (remember, he only won these states by 0.5% for most of them). That means that if Biden loses even 10,000 votes due to fraud or some technicality (the ballots arrived after the deadline), Trump could be declared the winner.

Again, I am NOT saying I want this to happen. I am simply outlining how this process works. If a court says “jump” you jump, no matter who you are.

Speaking of which…

Two weeks ago, Supreme Court Justice Alito (as in the Supreme Court of the U.S., not of just one state) ORDERED the State of Pennsylvania to segregate and count separately any ballots that arrived after 8PM on election night.

This is a legal order from the Supreme Court of the United States. If you disobey it, you can go to prison. And because it’s a federal violation, the lawsuit isn’t going to be “Joe Schmo vs. John Doe,” it’s “the United States of America vs. Joe Schmo.”

My sources tell me that for Alito to order this without any comment from other justices suggests the Supreme Court as a whole is supportive of his action.

So, this is the Supreme Court of the United States effectively stating, “we are now getting involved in this mess.” That is a big deal.

If you are looking for a reason as to why the media rushed into announcing Joe Biden as the President Elect Saturday (the day after Alito’s order), this is probably it.

The Democrats and their media allies (the media companies that lean left) realize that once the courts get involved, the odds of Biden actually winning drop dramatically. So, they are attempting to mount as much pressure as possible for President Trump to concede so that the election is finished before ever entering a courtroom.

Remember, the only way this election ends right now is if President Trump concedes. 

If he doesn’t, but instead chooses to fight in court, then the process follows the path I outlined a little while ago, where the courts decide which votes count and which ones don’t.

For an election in which multiple states were “won” by less than 0.5%, the odds GREATLY improve for President Trump once these issues are introduced in court. He only needs to have 10,000 or so ballots thrown out in order to flip multiple states.

And bear in mind, that if a given court accepts or rejects a given lawsuit, the situation doesn’t end there.

If either party or candidate is dissatisfied with a lower court’s ruling, they can appeal the ruling, which can result in the lawsuit moving up to a higher court, eventually reaching the Supreme Court, which serves as the ultimate arbiter of election law in the U.S.

This was the case with the 2000 Presidential election, when the Supreme Court ruled that vote cards from Florida that didn’t have clean hole punches were NOT valid, which gave the state to George W. Bush and resulted in Al Gore conceding the election on December 13th.

And the Supreme Court’s justices are currently 6-3 conservative to liberal. Even if Roberts were to side with the liberals, the conservatives still hold the 5-4 majority.

Put simply, the ultimate arbiter in court rulings on elections favors Trump. Provided he DOESN’T concede, the odds greatly favor him winning a second term.

That’s what the law and the courts say. And they’re the ones that matter in this situation.

With that in mind, we recently published a special report titled, The MAGA Portfolio: Five Investments That Will Make Fortunes During Trump’s Second Term.

In it, we detail five HIGH OCTANE investments that are primed to EXPLODE higher when President Trump wins a second term.

Each one of these investments is in a unique position to profit from the combination of Trump economic reforms and Fed monetary easing, combining high growth opportunities with extreme profitability.

We are offering this report exclusively to subscribers of our e-letter Gains Pains & Capital. To pick up your copy please swing by:

https://phoenixcapitalmarketing.com/MAGA.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

I want to stress in advance, that I DO NOT want to be political in this briefing. I am not saying I LIKE any of the recent developments. And I’m certainly NOT saying I want a particular candidate to win.

All I am saying is that the election is a mess and from what I can tell, no one in the media is actually outlining what’s to come based on the law. Instead I’m seeing a lot of political opinion, being presented as fact, when it isn’t.

The media wants you to believe the election is over.

By law, it isn’t.

Unless a candidate concedes, the election remains in play until December 14^th when states cast their electoral college votes.

So, unless President Trump concedes between now and then, Joe Biden hasn’t won anything, no matter what the media tells you. Indeed, the media has no say in this, anymore than they can decide what color the sky is; they’re simply trying to get you angry so you’ll continue to watch their awful shows so they can sell your eyeballs to advertisers.

With that in mind,  we need to take a step back and assess how this election is likely to play out based on the LAW, not public opinion or media propaganda.

Based on the law, it is highly possible and in fact probable that Donald Trump will end up winning the 2020 Presidential election.

Why?

Because the election is now in the courts. And the courts have a clear precedent for how contested elections play out.

When the courts get involved in an election, it becomes an issue of evidence. Specifically, what a given court decides is compelling versus non-compelling evidence, and how the court chooses to address the issue of voter fraud if indeed there is compelling evidence.

For instance, if President Trump’s legal team goes to court and says, “we want to have a vote audit in Michigan because there was voter fraud” the first thing the court will ask them is, “what evidence do you have to support this claim?”

If the President Trump’s legal team’s answer is “we saw some numbers that looked suspicious,” the court controls its urge to laugh, throws out the case, and that’s that.

However, if the President’s legal team responds, “we have sworn affidavits from 50 witnesses, video evidence, as well as three whistleblowers” then it’s a completely different story.

Once evidence of fraud is introduced to the courts via a lawsuit, the court, NOT the voters and certainly NOT the media, is in charge of the election.

The courts can demand a vote audit of every single vote counted in an election. If, during the vote audit, actual fraud is discovered, the court can rule that those votes are no longer valid, the formal vote counts can change, and it is possible that a given state ends up declaring a different winner.

Even if fraud is not discovered by the audits, but there is a particular problem with vote cards (the wrong type of ink was used, the hole punch didn’t go all the way through the ballot as was the case in Florida in 2000, etc.), the courts can deem those problematic votes as illegitimate.

This again can mean the formal vote counts can change, and it is possible that a given state ends up declaring a different winner.

This process is now underway in Georgia, Pennsylvania, Nevada, Wisconsin, Michigan, and Arizona.

Any one of those states could see Biden end up losing (remember, he only won these states by 0.5% for most of them). That means that if Biden loses even 10,000 votes due to fraud or some technicality (the ballots arrived after the deadline), Trump could be declared the winner.

Again, I am NOT saying I want this to happen. I am simply outlining how this process works. If a court says “jump” you jump, no matter who you are.

Speaking of which…

Two weeks ago, Supreme Court Justice Alito (as in the Supreme Court of the U.S., not of just one state) ORDERED the State of Pennsylvania to segregate and count separately any ballots that arrived after 8PM on election night.

This is a legal order from the Supreme Court of the United States. If you disobey it, you can go to prison. And because it’s a federal violation, the lawsuit isn’t going to be “Joe Schmo vs. John Doe,” it’s “the United States of America vs. Joe Schmo.”

My sources tell me that for Alito to order this without any comment from other justices suggests the Supreme Court as a whole is supportive of his action.

So, this is the Supreme Court of the United States effectively stating, “we are now getting involved in this mess.” That is a big deal.

If you are looking for a reason as to why the media rushed into announcing Joe Biden as the President Elect Saturday (the day after Alito’s order), this is probably it.

The Democrats and their media allies (the media companies that lean left) realize that once the courts get involved, the odds of Biden actually winning drop dramatically. So, they are attempting to mount as much pressure as possible for President Trump to concede so that the election is finished before ever entering a courtroom.

Remember, the only way this election ends right now is if President Trump concedes. 

If he doesn’t, but instead chooses to fight in court, then the process follows the path I outlined a little while ago, where the courts decide which votes count and which ones don’t.

For an election in which multiple states were “won” by less than 0.5%, the odds GREATLY improve for President Trump once these issues are introduced in court. He only needs to have 10,000 or so ballots thrown out in order to flip multiple states.

And bear in mind, that if a given court accepts or rejects a given lawsuit, the situation doesn’t end there.

If either party or candidate is dissatisfied with a lower court’s ruling, they can appeal the ruling, which can result in the lawsuit moving up to a higher court, eventually reaching the Supreme Court, which serves as the ultimate arbiter of election law in the U.S.

This was the case with the 2000 Presidential election, when the Supreme Court ruled that vote cards from Florida that didn’t have clean hole punches were NOT valid, which gave the state to George W. Bush and resulted in Al Gore conceding the election on December 13th.

And the Supreme Court’s justices are currently 6-3 conservative to liberal. Even if Roberts were to side with the liberals, the conservatives still hold the 5-4 majority.

Put simply, the ultimate arbiter in court rulings on elections favors Trump. Provided he DOESN’T concede, the odds greatly favor him winning a second term.

That’s what the law and the courts say. And they’re the ones that matter in this situation.

With that in mind, we recently published a special report titled, The MAGA Portfolio: Five Investments That Will Make Fortunes During Trump’s Second Term.

In it, we detail five HIGH OCTANE investments that are primed to EXPLODE higher when President Trump wins a second term.

Each one of these investments is in a unique position to profit from the combination of Trump economic reforms and Fed monetary easing, combining high growth opportunities with extreme profitability.

We are offering this report exclusively to subscribers of our e-letter Gains Pains & Capital. To pick up your copy please swing by:

https://phoenixcapitalmarketing.com/MAGA.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research