“Things don't turn up in this world until somebody turns them up.”
- James A. Garfield
PASSING THE TORCH: Day three was immensely important for Democrats as it signified a passing of the party torch from President Obama to Hillary Clinton. In his speech, Obama emphasized Clinton’s vast experience as a leader in public office, touting her ability to adapt to any situation, while imploring voters to defend his legacy by electing her as president. VP Joe Biden vouched for Clinton’s character, recalling weekly breakfasts with Clinton, where he learned her true passions, intellect, and toughness. Both hit on Donald Trump for his lack of substance and reluctance – even inability – to expand his limited knowledge of policy and international affairs, despite the information being at his fingertips. But the most vital speaker of the night was veep pick Tim Kaine, who introduced himself to an unfamiliar nation and highlighted the reasons why he was the right choice to round out the ticket.
TALKIN’ TRADE: VA Governor Terry McAuliffe is one of Bill Clinton’s closest friends, and like the former president, he speaks expansively about topics more wisely left undiscussed. McAuliffe told reporters that Clinton might not have been entirely serious about her opposition to the Trans-Pacific Partnership trade deal, a core Sanders and Trump economic-populist article of faith. We’ve touched on McAuliffe’s blunders before, including how him being the subject of an FBI probe for foreign campaign donations could negatively impact Clinton’s campaign, but new issues like this have us feeling the Clintons would rather keep their distance. Whether it was a miscommunication or not, the press and Trump have eaten it up. We can only think that this will add to Clinton’s trust issues as trade is a touchy subject for both candidates.
MARK OF KAINE: In a year when the veep choice matters so much, two questions remain – can Kaine make enough of a positive impact and is he liberal enough to woo leftist voters? Clinton took the safe route by tapping Kaine as her running mate, but it’s yet to be seen if he’s too safe of a pick. His style is anything but electric and he really doesn’t ignite progressives or other party factions. The Wall Street crowd is pleased with him because he is not Warren, and his pros ultimately outweigh his cons since VA is a highly contested swing state, his moderate views can corral undecided voters, and he speaks fluent Spanish. However, the pick is still a direct slap in the face to progressives as they feel they are not adequately represented.
CLIMBING CAPITOL HILL: Veep pick Mike Pence, a former congressman with close ties to the Hill, has helped Trump and his campaign step up its courtship of wary Republicans - and the efforts appear to be fruitful. The charm offensive comes after months of Trump picking on other Republicans and is aimed at rewarding surrogates who make the case for him around the Hill. Pence is working hard to reel in Republicans who’ve kept an arm’s length – even extending an olive branch to those once against Trump. If this is any indication of how Pence will perform in the future, Trump has made the right decision in choosing him. It’s imperative he grows his army as he will need all the backup he can get in the coming months.
WE COULDN’T MAKE THIS UP IF WE TRIED: In the last 6 months, the Federal Reserve has pivoted from Hawkish (December) to Dovish (March, on markets down), to Hawkish (April), back to Dovish (May Jobs Report bomb), and now Hawkish again! And we quote (because this is going to make them look really bad come the Q3 GDP report), “near term risks to the outlook have diminished”… ex-Durable Goods, ex-Capex, ex-Labor, ex-Profits… yes, until the next jobs report? The Fed is more short term now than a Connecticut prop trader pounding six Starbucks per day. If we’re right, Friday’s Q2 GDP report is going to be up big sequentially (we’re at +4.8% q/q SAAR), then down hard, sequentially, in Q3 (right before the election). Godspeed to them as they prepare to pivot back to Dovish (again). This is a professional and national embarrassment.
DISSECTING THE PARTY PLATFORMS: The Republican Convention concluded last week and the Democratic Convention officially kicked off this week. We put together a comparison of each party’s platform to help you better understand the differences and similarities in the policy agendas for the coming year. You can read the comparison here.