Notes from The Schwab Impact Conference

Bullet Points from Greg Valliere’s presentation

“An Inside View of Washington”

By Jon Aldrich

I attended the annual Schwab Impact conference in San Diego last week (I wish I was still out there after coming back to January in November here at home). Schwab Impact is the annual conference for financial advisors that Schwab puts on every year. I believe there were about 5,000 advisor attendees, plus another few thousand representatives from financial firms including fund companies, banks, insurance companies and software vendors. It is a fantastic conference and I have attended it several times over the years and always come home with plenty of new ideas and knowledge to pass on as well as meet some very smart people in the financial and advisory industry. It is a conference I look forward to most years, especially when it is in a warm weather location. (San Diego is not the worst place to be in November). I also may be inspired to write some additional blog posts from information gleaned from the Impact conference.

One of the perennial speakers at the event is Greg Valliere who is a well-known political and tax policy strategist with over 40 years of experience following political and tax issues in Washington D.C. He has spoken at many of the Impact conferences I have attended over the years and I always look forward to his non-partisan (at least that is how he comes across to me) way of summarizing political and tax issues taking place in the nation’s capital. He also provides a lot of information that I seem to have trouble getting straight answers for in the media or on social media. Overall, I am not a huge fan of politics and try to stay out of the way of it when I can, but Greg presents things in a way that makes it very interesting and gives you a good pulse of what is going on in our political system.

I wanted to share my notes from his presentation titled “An Inside View of Washington” with you. These are my raw notes based on what I heard (or at least believe I heard) at his presentation on the current state of affairs in Washington and some thoughts on the future. I am presenting in bullet point form just as he was laying them out and you can draw your own conclusions from them, I did not add any commentary. Just imagine you are in that audience in warm and sunny Southern California. So, without further ado, here is a summary of the many political topics Greg was firing off during his talk from November 6. I hope you find it as interesting and fascinating as I did:

Trump was the favorite to win the election in 2020 until last night (November 5th) when both houses in Virginia went Democrat. This could be construed as a rebuke to Trump and a possible sign of things to come.
Washington Post poll showed Biden ahead of Trump by quite a bit, and other Democrats such as Sanders and Warren also ahead of him. Trump has a lot of work to do and some states such as Wisconsin and Pennsylvania that he won in 2016 may go Blue.
But, Trump does a good job of controlling the news and is a most gifted politician at demonizing opponents. Also, a big advantage Trump has in 2020 is a weak field of Democrats.
There really are only 2 possible Democrat nominees, realistically, Biden and Warren. However, Biden is 77, makes a lot of gaffes and may not be at the top of his game and has shown some signs of slipping. Elizabeth Warren, many Democrats believe, is too polarizing and does not really have a credible plan to pay for Medicare for all.
He does not believe that Hillary Clinton will run, but you can never rule out a Clinton making a run at office.
Is there a surprise candidate on the Democrat side? Possibly Pete Buttigieg, but he is only 37. Also, keep an eye on Andrew Yang or Amy Klobuchar.
Senate is currently 53-47 in favor of Republicans, Democrats have the House and he thinks Republicans will keep the Senate in the next election and this is crucial for the markets as this is a huge firewall for Republican’s, especially should a Democrat win the Oval Office.
The wildcard in all this is geopolitical. You have Brexit, Hong Kong, Iran to worry about. Has Trump emboldened Iran to attack oil in Saudi Arabia?
The news flow the next few months is going to be very volatile, even by Washington DC standards. Hold on to your hat!
Right now the trends are not good for trump in regards to the polls, but we all know how bad the polls missed things in 2016.
The SECURE act is stalled.
Pence will run in 2024, but the candidate to watch on the Republican side is Nikki Haley. She looks like she may be an up and comer.
Trump thinks he can fire or at least demote Jerome Powell, the head of the Federal Reserve.
The House will stay Democrat next year as Republicans are retiring because they do not want to work under Nancy Pelosi.
The Supreme Court could go to 6-3 conservative if Ruth Ginsburg is not there for long due to her health.
A government shutdown is coming in December. This is a rich Washington tradition. The wall with Mexico will be the catalyst, but markets will likely take it all in stride.
After the Nov 5th Virginia election outcome (mentioned above) he believes that Trump signs a deal with China for at least Phase 1 and Trump will claim it is the greatest deal of all time. But the heavy lifting comes in getting Phase 2 completed. This will not be so easy.
If Warren were to win in 2020, much of her legislation would stall (as long as Republicans still hold Senate) and she would have to become more moderate to get things done. However, she could still undo a lot of Trump legislation and markets would suffer.
He ended on this note. If Trump gets impeached and VP Pence happens to get caught up in the scandal and also goes down, who becomes President…….…. Nancy Pelosi. He ended his talk with that.

I hope you enjoyed my notes from Greg Valliere’s presentation and at least have some Cliff notes as to what is going on in Washington and can now impress your friends. Then again, you are probably much better off not talking politics with your friends these days if you can help it.