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The Honest Truth
By Ajit Dayal

Voiceless in America

28 July 2016

I am here in the United States of America attending a conference.

Well, supposed to, anyways...

I lost my voice....it's not really contagious but I don't like others to feel nervous hearing a voiceless person croak. So I am staying away from most of the sessions of the conference.

Sort of a 'Sounds of Silence' moment for me.

The Democratic Party has already used the "Bridge Over Troubled Waters" song to patch up the rift between the Hillary Clinton and Bernie Sanders camps within the Democratic Party.

There is a lot going on in America: the Democratic Party has nominated the first woman from any major party to be the Presidential Nominee. Bernie Sanders - the socialist Democrat contender who actually represents his state of Vermont as an Independent - is out of the race. Emails released by Wikileaks (ostensibly sourced from Russian hackers) exposed the determination within the leadership of the Democratic Party to make sure that Hillary Clinton won the nomination. She did - with the help of super delegates with super voting power and a fawning media. And, of course, money from large companies helped. The people of America remain voiceless, the system still controls the message and the messengers.

Table 1: How the candidates got their funding.
(all figures in USD million) Hillary Clinton % Bernie Sanders % Donald Trump %
  Democrat   Democrat   Republican  
Individual Contributions 228 61 226 99 37 37
Small individual contributions 51 14 135 59 25 25
Large individual contributions 180 48 96 42 12 12
PAC Contributions 1 0 0 0 0 0
Candidate self-financing 1 0 0 0 50 51
Federal Funds 0 0 0 0 0 0
Other 34 9 2 1 2 2
Total of Outside Groups 110 29 1 0 10 10
Total of all 375 100% 229 100% 99 100%


Source: www.OpenSecrets.com


While Bernie had the hearts and wallets of the people with 59% of money flows coming in from small individuals, Hillary had 14% and Trump had 25%. Hillary got a total of USD 110 million from "outside groups" that did not contribute to campaign committees but supported the candidates. Bernie got USD 1 million and Trump got USD 10 million. Trump had USD 50 million of self-financing while Hillary had USD 1 million and Bernie had zero.

What was noteworthy was that, in the run-up to the nominations of their respective parties, Trump spent only USD 99 million: less than 50% of what Bernie spent and only 26% of what Hillary spent. Trump's blunt and controversial statements got him a lot of free TV and social media time.

After the dust has settled, it is now Hillary v/s Trump. As one commentator said on CNN: this is probably an election between two of the least liked candidates!

...and confusion in the world.

And while the elections have dominated the media, the economic world is wondering what the Fed will do and whether they will raise interest rates. At the start of the year, the Fed had indicated they may raise interest rates four times this year. The Fed meeting that ended on July 27th suggests there may be, if at all, one interest rate increase in the USA this year. Japan, meanwhile, has announced another fiscal stimulus equivalent to 6% of its GDP. Europe and UK are still working out what Brexit means. China is slipping into an unknown and India is waffling around wasting yet another opportunity to stand out from the crowd.

In the Indian context, not only will we be swept by whatever happens in the world but we will also be hostages of the outcome of the monsoon, the election of the next Governor of the Reserve Bank of India, the passage of the GST Bill and attempts to show unity in policy making, and the erratic behavior of a government torn between a slipping mandate and the need to win elections.

It will be a strange next few months.

Be careful.

Lose your voice, but don't lose your balance!


Ajit Dayal is a Director at Quantum Advisors Pvt. Ltd and Quantum Asset Management Company Pvt. Ltd.

Disclaimer:
The Honest Truth is authored by Ajit Dayal. Ajit is a Director at Quantum Advisors Pvt. Ltd and Quantum Asset Management Company Pvt. Ltd. The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and has not been authenticated by any statutory authority. The author, Equitymaster, Quantum AMC and Quantum Advisors do not claim it to be accurate nor accept any responsibility for the same. Please read the detailed Terms of Use of the web site.

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