In his lastest Q2 2024 Letter, David Einhorn discussed the U.S. political situation and upcoming presidential election, noting that from a market perspective, it doesn’t matter who wins, as both parties favor large deficits despite a strong economy. This supports his expectations of higher secular inflation.
He also criticizes both parties, suggesting they’re both trying to lose the election. Trump, despite surviving an assassination attempt, made an incoherent speech and chose an unhelpful vice president.
The Democrats replaced Biden with what he considers to be a far-left successor who communicates poorly. He concludes that while both parties seem to be trying to lose, one will inevitably “fail” and win.
Here’s an excerpt from the letter:
Looking forward, it is hard not to think about the U.S. political situation and the upcoming presidential election. Discussing politics makes few friends, so we limit ourselves to a few observations.
From a market perspective, we don’t think it matters very much who wins. The economic policies of both parties are remarkably similar. Both favor large deficits despite a strong economy. We believe this supports our ongoing expectations of higher secular inflation in the coming years.
As for who will win the election, both parties seem to be doing their very best to lose it. After the failed assassination attempt, former President Trump appeared to become a large favorite.
A few days later, he began his convention acceptance by spending 30 minutes with a “new speech,” explaining how his near-death experience convinced him that he needed to unite the country.
He then spent the subsequent 60 minutes seemingly forgetting what he had just said. Further, he picked a vice presidential candidate that doesn’t appear likely to help him win any additional votes.
As for the Democrats, they unburdened themselves by ‘convincing’ President Biden to step aside, only to replace him with an appointed successor who skews toward the extreme left and has a history of very poor communication.
The party probably had at least half a dozen other options that would have offered a clearer advantage against the former President.
Given how fast events are unfolding, the only safe prediction is that the election will, in fact, be held on November 5. Though both parties are competing to lose, inevitably one of them will fail… and win. We express no view as to whether we will know who won on November 6.
You can find a copy of the entire letter here:
Greenlight Capital Q2 2024 Letter
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