A Very Delicate Issue — Joe Biden’s Health; Plus, The Three Amigos Meet Today; Inflation Alert

by Greg Valliere, AGF Management Ltd.

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Insights and Market Perspectives

Author: Greg Valliere

November 18, 2021

A Very Delicate Issue — Joe Biden’s Health; Plus the Three Amigos Meet Today; and an Inflation Alert
November 18, 2021
HAPPY BIRTHDAY JOE BIDEN: The President turns 79 on Saturday amid growing speculation in Washington about his health.

WE’RE NOT AWARE of any specific, credible evidence that Biden is suffering from any physical or mental disabilities (he had two brain aneurisms in the 1980s). But the public, perhaps influenced by a drumbeat from conservative media, has concerns.

A NEW POLL FROM POLITICO shows that only 40% of the public believes Biden is in good health, and only 46% thinks he’s mentally fit. These two numbers are about 20 points lower than in polls taken a year ago. The poll also showed that by large margins the public doesn’t think Biden is a good communicator or a strong leader.

WE HAVE SEEN BIDEN over the decades, and it’s clear that he’s lost a few miles off his fastball. He seems frail and the White House frequently has to correct his statements. But we’ve talked with people who have been in meetings with Biden who report that he’s well-informed and articulate on key issues, far more than Donald Trump ever was.

NEVERTHELESS, THIS WILL BE A PERSISTENT ISSUE as Biden enters his 80s a year from now. Will he finish his term? Probably. Will he run again in 2024? Unlikely. Will he finish a second term at the age of 86? Extremely unlikely.
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THE THREE AMIGOS HAVE ISSUES: The leaders of the U.S., Canada and Mexico will meet in Washington late this afternoon with several major controversies on the table.

MUCH OF THE FOCUS TODAY will be on two major disputes between Biden and Canadian Prime Minister Justin Trudeau. First, the Biden “buy America” policy has generated concerns from Canadian businesses, particularly over huge subsidies planned for Americans who purchase electric vehicles, which Trudeau called “counterproductive” in a press conference earlier this week.

Second, Biden faces calls from environmentalists in the U.S. to shut down the Line 5 oil pipeline, which extends from Canada through Michigan. Considering the withering criticism of Biden from Republicans over gasoline prices, it’s unlikely that he would shut down a pipeline in the midst of an energy crisis.

BIDEN ALSO MAY FACE CHALLENGES from Mexican President Andrés Manuel López Obrador; they have had phone calls but have never met each other. Obrador, a fierce populist, had good relations with Donald Trump.

AT THE TOP OF THE AGENDA WITH MEXICO will be the issue of illegal immigration, which has decreased in the past few months but remains a major political issue for Biden, who will press for more immigration curbs. Obrador is also leery of Biden’s “Buy America” theme, which surely not will include U.S. investments in Mexican energy projects, which Obrador will keep off-limits.
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ANYONE WHO THINKS INFLATION WILL ABATE SOON should take a careful look at the ratified deal between Deere & Company and its 10,000 workers. The pact includes wage increases of 10% this year and 5% each in 2023 and 2025, along with lump-sum payments equal to 3% of wages in the other years of the contract.

WORKERS AND UNIONS HAVE AN UNUSUALLY STRONG bargaining position because of U.S. labor shortages. Other recent settlements at Kaiser Permanente and among Hollywood production workers resulted in generous deals.

IN ADDITION TO THE INITIAL RAISES, this week’s deal contains an $8,500 ratification bonus, preserves a pension option for new employees, makes workers eligible for health insurance sooner and maintains their no-premium health insurance coverage.

THE INFLATION THREAT, IN OUR OPINION, is not necessarily from commodity prices; oil and lumber and grain can go up or down. Wages and benefits are not going down; they only go up — and employers will have to pass along higher labor costs to their customers.

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.

About AGF Management Limited

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.

©2021 AGF Management Limited. All rights reserved.

This post was first published at the AGF Perspectives Blog.

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