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Jim Bianco Profile picture
@biancoresearch
Oct 2, 2020 • 5 tweets • 2 min read • Read on X
Too many are "misreading" the polls, betting markets and investor opinion around the election. They are not the same.

Please read this short thread ….

The poll analyzers were only giving Trump a 10% to 20% chance of winning (shown are FiveThirtyEight and the Economist)

(1/5)
Betting markets gave Trump a 42% chance of winning yesterday before the announcement of the positive COVID test. His odds were 47% before Tuesday’s debate. Now they give Trump a 39% chance. This marks Biden’s largest lead.

(2/5)
Investors were more aligned with the betting markets than the polls.

FT – (Sep 25) Investors anticipate Joe Biden election win

UK pollster Survation found that 60 percent of 91 investment professionals polled in Sep, most based in the US, believe Mr Biden will win

(3/5)
The difference between polls and bettors was going to be reconciled by election day. Today’s announcement that Trump tested positive for COVID only accelerates the process.

Betting markets are reducing Trump’s odds of victory and are aligning more closely with the polls.

(4/5)
We have contended the markets never fully priced in a Biden victory (and the increased regulation and higher taxes that come with it). Based on trading this morning, it appears they are now taking the prospect of a Biden presidency more seriously.

(5/5)

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More from @biancoresearch

Jim Bianco Profile picture
Jun 2
1/12

Polymarket recession odds peaked at 65% on May 1st, the April ISM release date, suggesting Liberation Day and the 20% stock market correction did not damage the economy, as the "soft data" warned.

Subsequent April data confirmed this.

Will May see more of the same?

🧵 Image
2/12

The prevailing narrative in the market for months has been that the labor market is going to fall apart, forcing the Fed to cut rates.

This has not happened, and so far, the "soft" (survey) data have been wildly off in predicting the economy.
3/12

ISM Employment upticked in May from April. The first monthly "May" data point suggests the labor market is still not weakening. Image
Read 12 tweets
Jim Bianco Profile picture
May 30
1/9
Why The Fed Is Not Cutting Anytime Soon

The economy is rebounding strongly, and prices are rising.

It would be reckless to cut rates under these conditions.

The market knows this ... see this chart.

🧵 Image
2/9
Collapsing Imports are Positive For GDP

*US GOODS IMPORTS FALL 19.8% M/M, BIGGEST DROP ON RECORD

The amount of imported goods declined in April, as expected. April 2 was Liberation Day, and the rise in tariffs slowed imports. Image
3/9
Slowing imports halved the Trade Deficit in April, also as expected. Image
Read 9 tweets
Jim Bianco Profile picture
May 26
1/5
Inflation Update:

May 1st estimated inflation at 1.35%. 25 days later, they are 0.72% higher at 2.07%.

Tariffs?
--
Truflaton measures more goods than services. Goods inflation is lower than services inflation.

So, the rate of change is more important than the level. Image
2/5
Before, Truflation was the Billion Prices Project, which is now called PriceStats and is owned by State Street Bank. The creator is @albertocavallo

On Thursday, the Financial Times featured some of their work. It says the same thing as truflation.

ft.com/content/b27e76…

See the red line on the right. With increased tariffs (red line to the left), the prices of goods originating from China are increasing rapidly.

Also note that the Chinese-originated price rise (red line to the right) began around May 1st, the same time truflation started its upward march.Image
3/5
From the FT:

The Yale Budget Lab says the average US family would pay $2,800 more for the same basket of products purchased last year, should tariffs remain at their current level, with lower-income homes more exposed.

Chinese products being sold in the US have already seen marked increases in retail prices, according to analysis of high-frequency data from PriceStats by Alberto Cavallo of Harvard Business School.
Read 5 tweets
Jim Bianco Profile picture
May 24
1/12

Is the consumer paying higher prices due to tariffs?

We don't know for sure, and will not for months, but some numbers suggest they are.

This will surge inflation and keep the Fed on hold for a long while.

Wall Street does not get this.

🧵
2/12

Customs collects tariffs daily and sends most to the Treasury around the 22nd.

On Thursday (May 22), $16B flowed into the Treasury's account.

Tariff collections are now ~$29B ahead of last year's. On Liberation Day, they were ~$5B ahead of last year.

+$24B in 7 weeks. Image
3/12

The US has been importing about $325B to $340B of goods monthly.

According to the latest data, imports have surged in the last few months (through March) as importers rushed goods ahead of Liberation Day. Image
Read 13 tweets
Jim Bianco Profile picture
May 1
1/9
ISM was released this morning, marking the first monthly data point since Liberation Day.

It beat expectations and is not giving indications that manufacturers "froze" or "hit a wall" post Liberation Day.
--
*US APRIL ISM MANUFACTURING INDEX FALLS TO 48.7; EST. 47.9 Image
2/9
It is consistent with decent NON-TARIFF growth. Image
3/9
Why did bonds not like it (yields moved higher)?  Maybe prices paid (tariffs?) Image
Read 9 tweets
Jim Bianco Profile picture
Apr 30
1/6
Wall Street only cares about weak growth and wants cuts.

Main Street cares about higher prices.

The Fed is aligned with Main Street.
🧵
--
Polymarket betting is as good a gauge as any to measure the consensus opinion.

Now, 70% expect that a recession will occur in 2025. Image
2/6
So explain this ...

Why is there only a 9% chance of a cut next week? Image
3/6
ASSUMING NO CUT NEXT WEEK, the probability of a cut on June 19 is just 60%. Image
Read 6 tweets

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