…and counting, to possibly the greatest show on earth. The US Presidential election. The Superbowl has drama mixed with Taylor Swift, and side servings of popcorn; but this year’s tussle for the White House has more. Much more. Trump, the cavalier incumbent, versus Biden, the seasoned pretender. Ahead of the election, economic data is likely to dust the narrative; payroll data on October 2nd will be key to framing the extent of the post-Covid recovery. Also colouring the vote this time round is the chance there is no actual result on election night, due to an expected surge in postal votes. The tail risk, amongst all the other tail risks, is that there is a bitter, drawn-out conclusion, with wet-lipped lawyers hogging the headlines and investors watching on through their fingers. Predictt, the political prediction market, suggests there is only a 53% chance of a result on the 3rd or 4th November. Whilst the national polls appear to suggest Biden will be measuring up the curtains in the Oval Office, it’s not about the popular vote. What matters is the Electoral College, and key battleground states such as Florida, Arizona, Pennsylvania and Wisconsin. What also matters is what happens in the Senate. This will be close. The Republicans hold 23 of the 53 seats up for re-election; meaning the Democrats only need to take a few to swing the Senate blue. Blue goes the Senate, and blue goes the White House – the lower house is expected to stay blue – and there is the prospect of major policy change: tax and spend. Higher taxes for corporations and high rollers; to the tune of almost $2trillion from the former, $1trillion from the latter, over the course of a decade. In July, Biden announced where he intends to deploy those resources: clean energy and infrastructure – roads, green spaces, EV charging stations. He also wants homes to be ‘weatherised’ in order to promote energy efficiency. In the context of a budget deficit projected to average 5.2% of GDP over the next ten years – before pencilling in any new net spending – whoever takes office faces a colossal challenge. For investors, whatever the outcome, the political uncertainty into year-end is likely to lead to bouts of volatility. Volatility leads to dislocated prices, and dislocated prices – for nimble, active investors – often offer buy-quick-while-cheap, long-term opportunities. The popcorn is optional.