Friedberg @ 00:33:53Wrong
politicsmarkets
Conditional on Democrats winning both Georgia Senate runoff races on January 5, 2021 and thereby securing effective control of the U.S. Senate (50–50 with Vice President as tiebreaker), U.S. equity markets could decline by approximately 30–40% within the following six months (by mid‑2021).
if the Democrats look like they're getting much more money into the state and they're actually going to, you know, get people to the polls and to the voting booths and actually get into this runoff on January 5th and actually flip, um, get both of those seats to be, uh, um, uh, to be blue. Uh, it's going to be a very different market environment. I mean, you could see the market drop by 30, 40% in the next six months.View on YouTube
Explanation
The condition of the prediction was met: Democrats won both Georgia Senate runoffs on January 5, 2021 (Jon Ossoff and Raphael Warnock), producing a 50–50 Senate in which Vice President Kamala Harris held the tie‑breaking vote, giving Democrats effective control of the chamber. (en.wikipedia.org)
However, U.S. equity markets did not fall 30–40% in the following six months:
- The S&P 500 (a standard proxy for “the market”) closed at 3,727.48 on January 5, 2021. (statmuse.com)
- By early July 2021, it was around 4,350+ (e.g., 4,352.34 on July 2 and 4,343.54 on July 6), implying a gain of roughly 16–17%, not a decline. (statmuse.com)
- Monthly data show the S&P 500 was positive or only slightly negative in each month from February through June 2021, with no crash anywhere near 30–40%. (statmuse.com)
- By year‑end 2021 the S&P 500 had logged 70 record closes and finished the year up about 27%, indicating a broadly bullish environment rather than a deep drawdown in mid‑2021. (cnbc.com)
Since the Democrats did gain Senate control as specified, but U.S. equities rose instead of dropping 30–40% over the subsequent six months, Friedberg’s conditional market prediction is wrong.