“Clearly, Markets Would Be Scared”: Don’t Forget About Wednesday’s “Other” Big Event

“Clearly, Markets Would Be Scared”: Don’t Forget About Wednesday’s “Other” Big Event

All eyes will of course be on the Fed this week, but lurking in the background is this guy…

That’s Geert Wilders and before you ask, yes, that’s for real. That’s really him and he really said that crazy sh*t a while back. That is not a Saturday Night Live parody.

So you know, when I talk about Wilders, Le Pen, Petry, and Farage posing an existential threat to the world’s collective sanity, that’s what I mean. As a reminder, Wilders is one of the European politicians on the Steve Bannon “usual suspects” list. Here’s a handy pocket guide:


Just to be clear: all of those people are f*cking crazy and the idea that they should be allowed to lead what amounts to a pan-European political movement is a bad joke (in the case of old Beppe, I mean that quite literally – he’s a career comedian).

But the Brexit referendum and the US election served notice that when it comes to bad jokes, some people don’t get what’s so goddamn funny. For those folks, these are legitimate candidates representing legitimate platforms and agendas.

And that brings us to the Dutch election – the first of three trials by electoral fire Europe will endure in 2017. Below, find a bit of useful color on this from MNI.


Wednesday’s Dutch national election has the potential to
rattle financial markets even if the anti-EU, anti-Islam Geert Wilders is
blocked from joining a new government, as the Dutch political establishment
pledges he will be.

The election is seen more as a barometer of populist sentiment in Europe
than a real threat that Wilders will succeed in pulling the Netherlands out of
the EU. Strong support for Wilders’ Freedom Party would be a sign that the voter
anger that helped prompt Brexit and the election of Donald Trump is alive and
well in Europe. And that would raise market fears about a much larger potential
risk to the EU — the election of the far right National Front leader Marine Le
Pen as France’s next president.

“It would be a major political shock because then Marine le Pen’s claim
that nationalism could conquer the Continent would be right,” Holger Sandte,
chief European analyst at the financial group Nordea, said in a podcast.
“Clearly markets would be scared.”

Here are some questions and answers about Wednesday’s vote and the possible
market reaction.

Q: What Do the Latest Polls Say?

A: The polls show that support for Wilders has been slipping. A Peil.nl
poll published on Friday projected that the Freedom Party (PVV) would win 22
seats in parliament, behind Prime Minister Mark Rutte’s Liberal Party (VVD),
with 24 seats. With only two days before the election, five Dutch parties are in
contention to come in first.

Q: How Are Markets Likely to React to the Vote?

A: If the polls are right the most likely result is a relief rally, with
the euro rising and yield spreads tightening. But if the PVV does better than
expected, Dutch and French yield spreads could widen sharply and the euro could
tank, analysts say.

A gain for the Freedom party of more than 25-30 seats, “would once again
show that opinion polls have misjudged the rise of euro-scepticism,” according
to HSBC. “This might lead markets to re-evaluate their expectations for a Le Pen
victory and could cause EUR-USD to fall.”

Q: Why Would a Dutch Election Have So Much Effect on France?

A: Because the election is mostly about broad issues like immigration and a
dissatisfaction with political elites than it is about national policies.
Wilders and Le Pen are both outsiders trying to bring down the political
establishment and their policy platforms — withdrawing from the EU, barring
immigrants from Moslem countries — are much the same.

Q: If the PVV Comes in First, Would It Be More Likely That the Netherlands
Would Leave the EU?

A: Not necessarily. Coming in first in the Netherlands does not confer a
right to form a government and all of the other major parties maintain they will
not go into partnership with Wilders.

However, if the PVV were to do much better than expected and win, say, 45
of the 150 parliamentary seats, it would be democratically difficult for the
other parties to ignore it. Wilders might not become prime minister, but the
resulting coalition would have to adopt a much more sceptical stance toward the
EU and Wilders would have a much larger platform to stir up anti-EU sentiment
ahead of the French presidential election in April and May.

Q: When Will the Dutch Election Results Be Known?

A: The first exit polls should be released shortly after voting closes at 9
pm CET on Wednesday and actual results will be published over the next several
hours. The final official results should be known in the early hours of
Thursday, March 16.

2 thoughts on ““Clearly, Markets Would Be Scared”: Don’t Forget About Wednesday’s “Other” Big Event

  1. Ok so clearly these folks are swinging for the fences!
    So the H can say with a straight face that none of the atrocities they are speaking of have actually happened?

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