French Election Thesis Part 4: Secret Sauce, Agruements against myself & Conclusion

2:40 AM

The undecided: Where the underdog could will win

With many voters undecided and i suspect many staying at home for the second round, it then becomes a differential in voter turnout. This is heavily in Le Pen favour.

A motivated unhappy is very powerful, especially if they know voting will help the cause. The previlaged in France will be the "unmotivated". Where there are no reprecusions to not vote, unlike Singapore and Australia, France has no such law/rule.

The last presidential election only 80% participating.

A motivated 40% can beat an unmotivated 60% simply via voter turnout diffentiential. Privileged few are known to be the ones who do not turn up.

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Agruements against my thesis:

I can on the lookout for reasons why my thesis will fail. I have evaluated 3 very solid counteraguments.

So here are my critical responses at to why Le Pen cannot win the second round.

Q: look at her father, he lost badly in the second round
A: Yes her father was hated, and his reputation as the devil caused him to lose a landslide victory in his presidential run.

But if you think Marine Le-Pen kicked her father out of the National Front and did not have her father advising her, you have to be crazy. She cleaned up the image after taking control and i am sure all of it is policitcally motivated. To think otherwise is Naive.

Q: Why would French people want Frexit? They are essentially what Europe stands for
A:  Look at the last 2 referedums in France, 1992 and 2005. Neither were large in margin though both were calling for increased intergration into the EU. They did not then, what about now?

Even if Le Pen wins, she still has to call for a vote, and that may or may not be successful

Q: But look at the media and what they are saying
A: The media and the polls are based around certain assumptions.

Once again look back at the old Referradums, people in Paris were generally in favour of increase intergration. Much like how Trump cannot win San Francisco or New York, there places are consider progressive and pro-establishment.

A city does not speak for the country.

The people who are woefully unhappy are based outside of Paris in the smaller towns.

Q: Her policies are ridiculous and anti-economic
A: Have you seen Melanchon policies? They are absolutely nuts.

But he has surged in the polls. Simply because people are unhappy. They want change. It preceeds logic.

It is why i will increase my risk is Melanchon supports Le Pen in the second round or vice versa.

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Conclusion

This is not a binary event, hence why i have a decision tree based on probable outcomees.

Trading plan around event: EURUSD only

Current position = 2% risked of my total account
If Le Pen gets into the second round = + 0.5% risk
If Macron gets into the second round = +0% risk
if Fillon gets into the second round = + 0.5% risk
if Le Pen and Melenchon fail to make second round = Exit all

if Mélenchon backs Le Pen in the second round = +1%  
if Mélenchon backs another party = reduce risk to 1.0%


Is it right or good for the world? Le Pen, Trump and Brexit proved something. Globalisation benefits the few. Xenophobia is a very real thing. Fear and terrorism certainly is a thing as well.

Globalisation. If you are a Marxist then no, this is a bad thing, if you follow Adam Smith's thinking then no, it is great.

My hope for a better future is that there will be a EU 2.0, one with integrated government and policies instead of stagnant and separate identities. If not the EU cannot compete with China and America. This was the whole point of the single market.

But alas, the greater good sacrificed for temporal gains was never in our nature.

We are traders, we can only oberserve the market, being stressed angry over the world does not help us. Whether we like it or not, the outcome is the same.

We cannot work hard, hustle and expect better trading results, it is why most fail, just pick your battles wisely.


Stay safe everyone!

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