The presidential debate tonight on foreign policy will quickly return to domestic economics if, as and when each of the antagonists can wiggle it in.
In two more weeks we will quickly go from speculative uncertainty to new forecasts. The Senate composition will be known and committee chairs known or surmised. The president-elect will be decided. The lame-duck session will commence. About the only thing known now is that the House will remain in Republican control with fewer tea partiers in place.
Markets like predictability whether the news is good or bad. Uncertainty is the heaviest weight on the market. It will soon be lifted. By yearend the US stock market will make new recovery highs. We remain fully invested.
Will the oil price and energy independence make it into the debate? These should be the premier item. Imagine if the US were truly energy independent. We would not run a large trade deficit or a current account deficit of any magnitude. We would not send our dollars into the hands of despots. The entire foreign-policy balance of the world would change.
Despots know this. And they try to manipulate our political system. We just saw an example with a report in the New York Times.
Here is the analysis of the report from Night Watch, published early this morning:
“Both Iran and the US have denied the accuracy of a report in the New York Times that Iran had agreed to bilateral talks with the US. The New York Times report saying Iran had agreed to one-on-one talks with the United States is inaccurate, and Iran has no plans in place for such a discussion, Iranian Foreign Minister Ali Akbar Salehi said on 21 October. He said, however, UN Security Council Permanent Five plus Iran (P5+1) talks on Iran's nuclear program could resume in late November, that is, after the US elections.
“Comment: Iran has no incentive to talk with the US administration before the elections. The US has no incentive to engage in bilateral talks with Iran because that would invest Iran with international stature it does not deserve and undermine the international effort to restrain Iran.”
The debate tonight is supposed to focus on foreign policy. That really means energy. We shall soon see if either candidate will level with us on this issue.