Submitted by QTR's Fringe Finance
The Brazilian selloff over the last 36 hours is a reminder that political outcomes can become catalysts for violent market repricing.
With the midterm elections just days away, I think investors should consider what a Democratic victory could mean for a stock market already showing signs of exhaustion.
I’ve spent months arguing that extraordinary concentration in technology stocks, speculative excess surrounding artificial intelligence, and uncomfortable valuations have created conditions for a significant correction. Others whom I respect are coming to the same conclusions.
The election doesn’t change those underlying problems, but it could introduce additional catalysts for investors to reconsider the assumptions embedded in their portfolios, an idea I started to explore back in August but want to supplement now, closer to election day.
In my opinion, one of the most underappreciated reasons American financial markets have performed so well over the last two years is that, for all intents and purposes, the United States has been operating with extraordinarily little regulatory resistance.
Regulations haven’t literally disappeared, but Washington’s prevailing philosophy has been unmistakable: loosen restrictions, encourage capital formation, and give businesses as much roo
