In what is unfortunately becoming only an annual tradition rather than a semi-annual one, Phil Denniston of
connected with yours truly Monday afternoon. Phil is the author of the Better Bedtime Stories children’s book series. There are five books in total and each installment offers a new lesson that pulls from history while teaching financial concepts. Business cycles, manias, debt, metal, Bitcoin (BTC-USD), and the fiat currency fraud; all are explained in a way that young ones can understand.This may not come as much of a surprise, but Phil’s views on monetary policy, Gold, and central banking align well with those of us who practice financial heresy. We spent the first half of our meeting of the minds discussing the current state of the 2024 US political cycle.
Following that embarrassing excuse for a Presidential debate, we touched on some interesting questions:
Who could realistically be Biden’s replacement if/when he steps down?
Are democrat primary voters tired of Lucy pulling the football away yet?
Do the democrats even want to win in November?
Is there a market impact to any of this political uncertainty?
Beyond politics, we dove into stocks, the case for treasuries, and shared some brief thoughts on Bitcoin. The video is worth the price of admission just for Phil’s NVIDIA NVDA 0.00%↑ options strategy.
The only downside this time around was time itself. Phil and I were both up against deadlines this afternoon and could have easily chatted for another 45 minutes if we had the time. Perhaps we’ll just have to do these less sporadically! As is usually the case when I touch base with Phil, I really enjoyed this conversation and I hope you guys enjoy it as well.
If you want more of Phil and I together, check out our last conversation from August 2023:
It’s fairly deep in the archives, so it’s paywalled at this point. This is perhaps a good time to remind that free subscribers to Heretic Speculator have just 2 more days to lock in 25% off the annual rate forever:
I launched this Substack early in the 2nd half 2021. In the three years since I started this thing, the “official” rate of consumer price inflation is up 15%. I’ve never raised prices. But I have dramatically scaled back discount offers and I can confidently say any future offers are never going to be this good again. Furthermore, there’s no guarantee the free tier will always be an option.
Don’t FAFO:
Lock it in.
Biden and the Betting Markets
By now, I think most have probably seen some of the lowlights from last week’s debate. Frankly, I don’t see much reward in getting into too many details. Biden had a rough night and what followed that performance can best be described as a white flag.
I put some of my feels out there into the universe already last week:
Where to begin on that debate? At times excruciating to watch. Among a plethora of lowlights, the most painful exchange was probably watching the two of them argue about their golf games - a disturbingly tone deaf moment at a time when real people are struggling. Following the debate, the CNN panel was merciless and the betting markets are sniffing out the inevitable… change is coming. via Notes
Now here’s the interesting part; when I shared that Note, it was shortly after 11p eastern the night of the debate. ElectionBettingOdds.com was created by fellow Substacker
. That model had Biden winning the nomination at just 48.1% when I posted the screengrab. While still well below the 85% from the day prior to the debate, the current 69.2% reading could be viewed as a fairly convincing comeback for Biden:
However, I’m still of the view that the Democrat party leadership probably wants to see Biden to step down. Consider the electability percentages which are described in this way:
the chance that each candidate will win the general election IF he or she wins the party nomination. Calculated by dividing each candidate's general election odds by nomination odds. Averages all markets: Betfair, Smarkets, PredictIt, and Polymarket.
Here we see California governor Gavin Newsom is more electable than both sitting VP Kamala Harris and President Joe Biden. I think this is the most interesting data point because it shows the vise that Democrats are currently in. The betting markets think the Chinese Child Destroyer has a better shot of winning if nominated than the people who are in the offices already.
And yet, he’s a long shot to win the presidency because his chances of winning the nomination are so low. How is this party in such an obvious mess?
Insert Chicken/Roost Idiom
Might I suggest pushing Biden upon the filthy masses in 2020 was a short-sighted effort? I’ll never be able to unsee this chart:
On February 24th 2020, Bernie Sanders had a 53.2% chance of winning the nomination and appeared to be running away with it after primary wins in Nevada and Hew Hampshire. That same day the next closest probability for the Democratic nomination was 19%… for Michael Bloomberg. Iowa had gone to Pete Buttigieg earlier in the month.
Probability of a Biden nomination? 7.8%… barely ahead of “Mayor Pete.”
Two weeks later, Biden’s nomination chances approached 90% after a strong Super Tuesday that was immediately preceded by Buttigieg and Amy Klobuchar suspending their campaigns and endorsing Biden. Two days before Biden’s showing in South Carolina, the New York Times published this:
Dozens of interviews with Democratic establishment leaders this week show that they are not just worried about Mr. Sanders’s candidacy, but are also willing to risk intraparty damage to stop his nomination at the national convention in July if they get the chance.
What would have happened if the party wasn’t so worried about Sanders? We’ll never know. Everyone got in line and got behind the guy the establishment wanted. However, it’s now quite obvious he has outlived his usefulness.
Problem for them is, the guy who prediction markets seem to think can beat Trump head to head doesn’t necessarily check the right surface layer boxes. He’s also the poster boy for COVID-era double standards and is the governor of a state that is losing taxpayers to other jurisdictions. I’m not really sure he’s a slam dunk even if he gets the nomination.
You know who doesn’t have any COVID stink? You know who checks off some of the right surface layer boxes? Oh yes, I’m going there… and she’s on sale right now…
Disclaimer: I’m not an investment advisor. Betting on election outcomes is only for the most “degen” of the degenerate gamblers. If, and I stress IF, you don’t believe the election will be on the up and up, than fading Trump at 42 cents is probably the play. I am not personally making that wager. I am long Bitcoin and Gold - each of which are probably the best ways to play political chaos.
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