AGF Management : Denying the Virus, Denying Trump’s Defeat

Insights and Market Perspectives

Author: 8

December 9, 2020

THE UNITED STATES is at a breaking point, refusing to lock down despite soaring
fatalities. We understand that hard-working business owners face financial ruin; it
isn't fair - Covid isn't fair.

A REBELLION IS GROWING, from Staten Island NY to Orange County CA. Restaurant owners are defying orders to shut down, and the police in many jurisdictions will not enforce orders from governors. In California, Gov. Gavin Newsom's directives have little credibility; he joined lobbyists at the luxurious French Laundry restaurant, making a mockery of social distancing.

THIS IS NOT JUST AN AMERICAN PROBLEM: Defiance of the law is prevalent in Manchester, England, and in Germany and much of the world. People are giving up, just as vaccines offer hope.

AS FATALITIES SURGE, we envision a self-quarantine by people who are terrified after watching the evening news, which is reporting that fatalities in the U.S. could hit 4,000 a day by January. The deniers are loud and angry; they may dominate Idaho, but most Americans will shy away from shopping malls and airplanes. Weak first quarter GDP seems likely.

THE SURGING VIRUS improves chances of passing a relief bill, which looks more
likely after yesterday's confusing developments. The White House apparently has signed off on a bill costing a little more than $900 billion - a major development. But Treasury Secretary Steve Mnuchin wants stimulus checks of $600 per individual, not an extension of unemployment benefits. He will accept some aid for state and local governments.

DEMOCRATS WERE LUKEWARM, but stimulus checks are now on the table - supported by Bernie Sanders and the left, and the increasingly powerful Sen. Josh Hawley and the right. Significantly, Mitch McConnell apparently has signed off on the dollar amount, while indicating he could wait until 2021 to win liability protection for firms that face Covid-related lawsuits.

IT WILL TAKE SEVERAL DAYS before a relief bill comes into focus; we still think it will pass before lawmakers leave town on Dec. 18 or 19.

IN THE MEANTIME, ANOTHER FORM OF DENIALISM has become increasingly virulent. Most Republicans in this city won't state the obvious - Donald Trump lost the election. Perhaps that will change after next Monday's official Electoral College vote, but it appears that the president's rhetoric has convinced his angry supporters that the election was rigged.

WITH A MAJORITY OF REPUBLICAN VOTERS stating adamantly that Trump won, nothing will change their denial of a Biden presidency. Trump's lawsuits have been laughed out of courts, but he will not relent because Trump will run for president again - and the deniers have already made him the favorite to win the GOP nomination in 2024.

The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF's suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

For further information, please visit AGF.com.

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