DisTrumption: What I Saw In Chicago

http://www.trendmacro.com/system/files/reports/20160314TrendMacroLuskin-G4.pdf
Donald L. Luskin
Monday, March 14, 2016
It was carefully staged, based on a stable game-theoretic position that works for all sides.
Strategic view: 

With the disruption of Trump’s Chicago rally Friday, a crazy election year takes a disturbingly chaotic turn, reminiscent of the incoherency of 1968. But that was a pretty good year for stocks. And the Chicago event wasn’t as incoherent as it looked. I was there. It was definitely staged, with the UIC Pavilion deeply infiltrated by protestors who all simultaneously launched on command. Disrupting Trump is a stable game-theoretic position for all concerned – protestors get free publicity, and Trump gets to position himself as Reagan did in 1966 versus the UC Berkeley protestors, and as Nixon did in 1968 promising “law and order.” Analogies to the 1968 Democratic convention are false, because that demonstrated an internal schism, not action by opponents. Our election model shows the GOP candidate – whoever he is – winning by 170 Electoral College votes. The disruptions underscore our belief that the election could be 2016’s black swan for markets, but we don’t yet see this election’s crazy logic really getting any crazier.

Section: 
TrendMacro