I think I’ve made it abundantly clear by now what I think of US election analysis that doesn’t deal directly with the high likelihood of a disputed vote, the distinct possibility that a loss for Donald Trump could result in violence and the tail risk of autocracy in a Trump win: Analysis that doesn’t address those issues is worse than useless, as the late Charlie Munger might put it.

Ignoring those issues would be excusable were it not for the fact that the last election was disputed, led to violence and, if a majority of Republicans had their way, might’ve resulted in the usurpation of American democracy.

But, as noted in the linked article above, we have to make allowances when it comes to Wall Street research. Because the Street’s political economists aren’t permitted to “go there,” so to speak. Even though the country already went there. And may well go there again.

Instead, we get milquetoast missives about tariffs, taxes and fiscal policy. With that in mind, Goldman embarked on a scenario analysis for four possible election outcomes. And ventured a few educated guesses as to cross-asset reactions for each. For what it’s worth:

1. Republican sweep. Our baseline scenario predicts a modest rally in equities (fiscal and tax boosts offset by tariff-related worry), yield upside and appreciation in the trade-weighted USD. The main risk to that comes from a larger negative reaction to potential tariffs that would weigh on equities and bond yields.
2. Democratic sweep. Our baseline scenario predicts modest equity downside (a fiscal boost and some modest tariff relief outweighed by corporate tax risks), modest USD depreciation and higher yields. If there was more substantial relief from avoiding potential new tariffs, this would lead to more positive equity outcomes and reinforce the upward shift in yields and the potential depreciation for the USD. A larger anticipated fiscal impulse would counter the tendency for USD weakness.
3. Trump with divided government. Our baseline scenario predicts modest equity downside (modest fiscal restraint and tariff risks but some regulatory easing), slightly higher yields and meaningful USD upside (though less than in the sweep case, without the fiscal boost). If the market reacted more intensely to potential tariffs, alongside the prospect of fiscal restraint, this scenario could have the largest downside for equities and yields.
4. Biden with divided government. Our baseline scenario is that this mix creates a flattish outcome for equities as fiscal restraint is balanced by modest relief from corporate tax and tariff risks; yields would be expected to fall; and the USD should weaken (both from fiscal restraint and tariff relief). As with a Democratic sweep, the main alternative to this baseline is if relief from avoiding new tariffs was larger than expected, which would add to equity upside and USD downside, and could potentially push yields higher instead of lower.

There are (at least) three issues. First, this is all so indeterminate — i.e., replete with “ifs,” “buts,” “althoughs” and “howevers” as to be largely meaningless.

Second, the estimates themselves (in the table) rely on an imperfect modeling exercise predicated on assumptions about policy platforms, a hodgepodge of hypotheticals and an attempt to guesstimate “the potential market reaction [to] the prospect of tariffs,” an endeavor Goldman euphemistically describes as “challenging.”

Third, it completely ignores any volatility or generalized market angst that could accompany a prolonged period of uncertainty following a disputed election.

Generously, Goldman’s exercise is a thought experiment. And not a very imaginative one at that.