Three scenarios could play out after this election, says Hedgeye Demography Sector Head Neil Howe.
- Conciliation
- Gridlock
- Civil War
“We’re accustomed to those last two but, that last one, civil war is a lot more likely than most people think,” Howe says. “The House could draw up articles of impeachment on Hillary Clinton within the first month.”
In the HedgeyeTV video above with CEO Keith McCullough, Howe explains how this election fits into the cycles of history. “Fundamental political realignments occur every 80 years in this country, like the New Deal era or the 1850s with the disappearance of the Whig Part and its reappearance as the Republican party,” he says.
Howe thinks we’re on the cusp of one of these realignments today, which he calls a “Fourth Turning.”
What does it mean for investors?
- Angry Electorate: “A good 35% of the electorate will believe this is a stolen, rigged election, not matter who wins.” Expect gridlock, rising populism and partisan bickering.
- The List of Losers: Financials, luxury brands and firms with dominant market share.
- Relief Rally, Crash or Both: “Remember the timing of this, in January it could be more credible that the economy really is slowing, maybe even going negative.”
- Recipe For Disaster?: The country may be at a tipping point with a slowing economy, monetary policy out-of-ammo, no fiscal spending appetite and rising geopolitical risks.
“This is a very vulnerable time,” Howe says.
Click here to watch the full video “Clinton vs. Trump: How Election 2016 Will Impact Financial Markets.”
