6 and 0

Macro Perspectives: Thu 3 Sept 2020

Stocks continue to move higher, for the reasons we've discussed here daily (namely, a policy response that is far bigger than the economic damage). Yet, the media and some of Wall Street continue to seem perplexed.

What continues to be ignored is the rhetoric slinging back and forth between Pompeo and China - Pompeo's speech at the Nixon Library, back in July, sounded at best like a cold war declaration at worst, like a 'hot' war declaration. This week Pompeo was asked about the 'cold war' analogy and he said it has some relevance, but "this is different than cold war."

There are a number of "flashpoints" that continue to build in tension in recent months, all provoked by China: expansionist actions in the South China Sea, Taiwan and Hong Kong.

Now we have the Pentagon talking about China's nuclear capabilities. Yesterday morning, a mouthpiece of the CCP, the Editor of the Global Times, said the U.S. government is underestimating how many warheads China has. 

As we’ve discussed back in July, it seems like we are on path for some military action with China, before the election.

Incumbent Presidents, when they’ve actively sought a second term in war time, have a 6-0 record.