Biden: Be Careful What You Wish For

The threat of Sanders as president has receded. But now there is a different threat – the candidacy of Biden, who is far more likely to beat Trump than Sanders ever could have been. With three leading “suspended” Democratic aspirants endorsing Biden, the risk of a “brokered convention” is now virtually eliminated, which means the party will be more unified going into the election. If it’s close, Warren could be the “broker” with her 47 delegates, and could be Biden’s VP. Given his age, his VP pick will be key. We loosely predict Klobuchar, but if Biden picks an economic radical like Warren, that will introduce a new dimension of risks for markets. Our quantitative election model still predicts a strong win for Trump, unless the economy deteriorates in the wake of the Covid-2019 crisis.