In financial markets, the outcome of a presidential election is most important in the sense of “What should I invest in if Trump fucking wins?” And the wizards of Wall Street are not ruling that possibility out!
For months now, there have been discussions of “The Trump Trade”—that is, the optimal places to put your money in the event of a Trump presidency. The prescriptions vary, but generally they bet against global trade, on gold, against the S&P, and against the Mexican peso, among other things—a standard “apocalypse is coming” trade with a xenophobic twist.
Online betting markets are giving Trump less than a one in four chance of winning. But it appears that those who manage the world’s money are slightly more eager to hedge against doom. Bloomberg surveyed a handful of large investment firms, which control $500 billion between them, and they gave estimates of the probability of a Trump victory ranging from 30-35%. About one chance in three.
Pretty good odds, but not super good. Then again, take heart in the fact that Wall Street money managers who control hundreds of billions of dollars are wrong about things all the time.
When Hillary wins tomorrow, you will be able to watch The Trump Trade falling apart in real time.