Dem
50
GOP
50
There are many ways to try to forecast elections. Using the fundamentals is one way. When there is peace and prosperity and no Americans are dying in a war somewhere, the incumbent's party usually wins. The polls are another technique. Maybe asking people who they think will win is even better. Then there are the betting markets. What about the stock market? Since 1928, when the S & P 500 was up during the last 90 days before the election, the incumbent party won the White House 83% of the time. That's macroeconomics. How about microeconomics? Here is the stock price during the past 12 months for DJT, the company that owns Donald Trump's boutique money-losing social media site:
As you can see, it has lost 80% of its value since its high in April and two-thirds of its value since the end of July. What's up? Two things. First, if Trump loses, very few people will want to hear what Trump has to say, so the company will probably fold due to its massive losses. The nearly straight downward line since the peak in July suggests that many of the stockholders think Trump will lose. Is this the wisdom of crowds or the stupidity of crowds?
The second factor is that Trump is now free to dump his stock. That will force the price down, maybe way, way down. Current stockholders may not want to be holding the bag when this happens, so they have been getting out gradually over the past month or two. If Trump were to try to dump tens of millions of shares now, the market in the stock would freeze because there would be massive amounts of stock for sale and no buyers. Well, with one possible exception. A foreign dictator with an unlimited amount of money to throw away could buy up all the stock at the current price. Trump would stand to gain a billion dollars or two. Who might do that? Russian President Vladimir Putin probably doesn't have the money to spare. Chinese President Xi Jinping has the money but is much too smart to waste it on trying to buy Trump's loyalty, which is worth less than his stock. The most likely candidate is Saudi Arabia's Mohammed bin Salman. He has so much money that he can afford to throw away a couple of billion in a longshot chance that Trump wins and then give him whatever his heart desires. (V)