First, let's discuss Trump's chances of winning, which is actually the foundation of all logical deductions. Generally, people looking at the trends of the election will refer to polls; although polls are an important indicator, as we have emphasized in almost all our videos before, multi-dimensional indicators can better reflect the reality of the situation. Therefore, we will look at three areas: one is the betting platforms, the reason is self-evident, those who can really influence these platforms are never retail investors, so the probability of candidates winning on these platforms represents the will and expectations of interest groups. The second is to observe the attitudes of major institutions; during this time, JP Morgan, Goldman Sachs, Deutsche Bank, and UBS have all expressed their attitudes, which not only guide market direction but also express the attitudes of interest groups and test other interest groups. The third is to observe the direction of Wall Street capital, which is the most direct evidence, after all, what is said is not important, what matters is voting with their feet; as long as the capital genuinely invests, their attitude is real. So what do these three places represent? First, let’s look at the betting platforms based on data compiled by the Financial Times.
The average probability of Trump winning on the betting market is close to 60%, meaning nearly 60% of people think or hope Trump will win. On the famous Poly Market, Trump's winning probability has even reached 64%. There is a very interesting detail here: Poly Market itself is a platform open only to traders outside the United States, and according to industry trackers of funds on this platform, a small group of anonymous traders betting millions of dollars has raised Trump's winning probability. Among them, four anonymous accounts are particularly noteworthy; they have invested heavily, and if Trump wins, they could collectively earn nearly $43 million in returns. This situation may distort the indicators of the betting platform to some extent, so we need to look at more information. JP Morgan mentioned in a research report released on the 17th that the capital flows of hedge funds indicate their strong preference for assets related to the Republican theme. If we link this to what Morgan Stanley's CEO said at the Davos Forum earlier this year about many of Trump's policies.
If they are all correct, then Morgan Stanley's attitude can be said to be very clear. Subsequently, Goldman Sachs also stated that the scenario of Republican victory has become one of its preferred trades before the election. Its vice president, Vincent Misch Charter, openly stated in Goldman Sachs's latest annual report that the market's positioning had already leaned towards Trump's victory before the recent rise in Trump's odds. UBS trader Michael Romano wrote in a report that UBS's hedge fund for Republicans against Democrats had risen 15% in October, almost a straight upward trend. Deutsche Bank believes that if Trump is elected, the dollar index will strengthen again, while if Harris wins, it will trigger a decline in the dollar. This judgment is also easy to understand; after all, as the election progresses, the dollar index is starting to rise again. These statements may seem vague to everyone, but in essence, they are saying that the market has already priced in Trump's victory, but this can't be said directly, so various professional terminologies are needed to express it, making it difficult for everyone to understand. However, it doesn't matter if they don't understand what they are saying; just look at what they do.
That's enough; some large hedge funds and asset management companies have already begun to position themselves. On one hand, they are massively selling off representative assets of a Democratic victory, such as renewable energy, their positions have previously been bearish and have become even more bearish now. On the other hand, after freeing up positions, they are starting to buy large amounts of stocks and options that may benefit from Trump's victory. Here, let me give two examples for better understanding: one is Trump's own social media; previously, wasn't Trump banned from the Democratic social media? Then he created a platform called Truth Social, which has also entered the capital market. On October 10, a Wall Street trader bought nearly $9.47 million in call options, with an expiration date of November 15. When he bought this option, it was priced at $16.4. With the stock of Truth Social surging by 11.44%, it has now risen to $14.4, more than doubling. In addition, during this time, Musk's support for Trump can also be considered unreserved; he has reportedly spent $132 million for Trump's campaign.
The market response received by Tesla's CEO is that after Tesla released its earnings report, the data exceeded Wall Street's expectations, leading to a consecutive two-day surge in Tesla's stock. This is the result of capital voting with their feet; they have genuinely begun to support Trump and his related assets. Goldman Sachs has actually already taken its position; according to data, Goldman Sachs's Republican victory basket, which consists of stocks and assets that would benefit from Republican victories, has reached a historic high. In other words, Goldman Sachs has historically held this batch of assets related to Republican victories, while the Democratic victory basket has reverted to the level during Biden's time. UBS, as mentioned earlier, has also seen its Republican victory basket surpass that of the Democrats, with a consecutive 14-day rise, essentially clarifying the trend and positioning. Finally, regarding the topic of which wealthy individuals are supporting whom, generally speaking, these wealthy individuals have also completed their alignments. According to data from campaign donation tracking website Open Secrets, in 2016, Trump received...
Large donations account for only 14% of Trump's funding, while this year this figure has changed to 68%. Basically, Trump's campaign funds are sourced from the elite class; besides Musk, we can see that those supporting Trump are basically strongly related to the real economy or closely aligned with Trump's policies. For example, the CEO of Blackstone Group, Steve Schwarzman, hotel tycoon Robert Bigelow, and activist investor Nelson Peltz are representatives from America, as well as representatives from deep-blue Silicon Valley, such as PayPal co-founder David Sacks and Chamath Palihapitiya from the Social Capital. Moreover, Vance, who is beside Trump, is backed by Peter Thiel. The PayPal mafia has suddenly come in three; no wonder everyone is analyzing why Silicon Valley supports Trump. Unfortunately, however, some established capital in Silicon Valley, such as Bill Gates, who suddenly invested $50 million, as well as Google, Apple, Oracle, Nvidia, and Amazon, have donated to Harris. This reflects some issues we will discuss later, so looking at the overall picture, it's not difficult.
Help us understand why Trump's odds of winning seem to be increasing. Next, we should discuss what the world would look like if Trump were to take office. If Trump's policies are summarized in very crude terms, they would revolve around several key points: reducing taxes for the wealthy, implementing protectionism through tariffs, loosening market regulations, expelling illegal immigrants, encouraging fossil fuels, and maintaining technological superiority through hegemonic status. The impact of these policies on the current global landscape can be summarized in one word: conflict. The result of intensified conflicts will accelerate the process of globalization's disintegration and reorganization; the turmoil resulting from disintegration will become increasingly intense due to the speed of the process, and the resistance encountered during reorganization will also escalate in the short term due to this acceleration, ultimately likely manifesting as confrontations more intense than current trade frictions and geopolitical conflicts. Moreover, the most troublesome aspect is that such confrontations will not be determined by other economies; other economies, whether China or Russia, whether Europe or Japan, are passively dragged into the conflicts brought about by changes in US policies.
However, the introduction and implementation of these policies are aimed at safeguarding American interests, and currently, from the election situation, American interest groups are, to some extent, willing to accept the direction brought by Trump. As previously mentioned, they have invested real money, so they naturally expect this future to bring them corresponding returns. Thus, they and Trump will form a synergy, pushing these policies into the current global system while engaging in internal struggles, especially the parts targeting China, which will surely become sharper. This sharpness, I believe, has already taught everyone what sharp friction means, thanks to the various matters brought about by the trade war initiated by Trump. So, if such intensity rises another level or two, what kind of friction will the United States provoke in the future, and how will it suppress China, we can actually anticipate. And along with Trump's foreign policy of isolationism, these intense external frictions may instead become leverage for Trump and the interest groups tied to him to gain advantages in internal struggles. Because once the United States becomes isolated in the world system, the ways it can choose to create friction will...
Are more flexible and without bottom lines. Therefore, the 'Three Seas and One Side' we frequently mentioned in our previous videos may likely become a geopolitical issue that the Trump administration promotes frictions to gain benefits for itself. On the industrial side, the Trump administration is genuinely trying to restore American industry, which is one of the reasons those capital groups will fight for Trump. The United States once offset local high labor costs and political costs through attractively low costs of capital, land, and technology. Although the overall industry repatriation has failed, it cannot be said that there were no achievements. Now, the Trump administration will combine with technology elites in Silicon Valley, especially those in virtual currencies and AI, to initiate a new round of industrial repatriation. The siphoning effect on global industries from this may be a new economic siphoning challenge that all economies must face, aside from the gradually ineffective dollar tide. If a certain economy wants to stop the United States from conducting new industry siphoning through high-tech means, then an isolated America may become even more...
The bottom line is that America will bring many unexpected shocks to him; perhaps Israel has already provided a model for the world in this regard. Looking at all this comprehensively, it is not difficult to understand why we say that if Trump wins, America will bring escalating conflicts to the world. Another more unsettling outcome is Harris winning against the odds. Harris is not without sufficient interest groups behind her; the interest groups behind her are even stronger. Let's assume such an outcome: remember, this is just a hypothesis in the current relatively weak position of Harris, where the final election result turns out to be Harris winning. Does this mean that these interest groups forcibly created the fact of Harris's victory for their own interests? Does it indicate to everyone that the rules no longer matter, and that their own interests have surpassed all of America's history and rules? If such a situation really arises, I believe that the long-established American capital behind Trump and the new elites in Silicon Valley supporting him will definitely not tolerate it. As for Trump, he is gradually shaped through long-term internal struggles.
A mature politician cannot tolerate this. When both sides have no room for de-escalation, a more chaotic era may begin. This reflects the issues that emerged after we previously mentioned the split in Silicon Valley into two factions. Is this fortunate for the world? No, this may be even more terrifying than escalating conflicts. So what will the US election ultimately bring to the world? Uncontrollable escalating conflicts or chaos? We can only wait and see and prepare thoroughly for it.