Wednesday, April 26, 2017

Marine Le Pen's victory is unlikely but not very unlikely

Many of us were carefully following the first round of the 2017 French presidential elections.

Dark blue Le Pen won much of the East or Northeast, yellow Macron won much of the West or Southwest, red Mélenchon was #1 on some islands and two spots near Spain, and light blue Fillon scored a victory in a spot West from Paris and in the French "Middle East" – although he was predicted to take Paris.

At the end, the results almost exactly agreed with the predictions – which has been unusual in recent times. Centrist Macron (24%) and patriot Le Pen (21.30%) made it to the second round while mainstream post-Sarkozy Republican Fillon (20%) and the holographic green Bolshevik Mélenchon (19.5%) had comparably good results. Socialist Hamon (6%) was the winner among the losers.

Because of the lack of surprises, the euro jumped by 2% relatively to the dollar and the European markets added some 3% on top of that on Monday. It's generally believed that Macron will beat Le Pen roughly by 60-to-40 percent in the second round on May 8th.

It seems totally plausible but I am far from certain about it. Fortuna offers you odds 4.8-to-1 if you bet on Marine Le Pen. I am thinking about betting on her. The global bookmakers offer the same 4.5-5 to 1 so you can't make an easy profit by combining several bookmakers. ;-)

I think that Le Pen rightfully disagrees with many wrong things that are happening in the European Union these days and I would support her for these reasons. And she is the clearest opponent of the Islamization and the propagation of terror in France – and the biggest defender of France as a European country which seems like a very important issue for France (not so much for Czechia so far, thank God). On the other hand, her economic views are make her a far left politician and I have some problems with that. I hope she won't be too shocked by that but there would be a nonzero probability that as a Frenchman, I would be voting for Fillon. I find him more sensible than Sarkozy – and Fillon is somewhat opposing the unification policies at the European level which could be enough for me. The "scandal" that weakened him a few months ago would probably look insignificant to me.

My sister lives in the French Riviera and her BF is one of the cops who were shooting at the truck terrorist in Nice. He voted for Le Pen and he's not unusual. First, the map at the top shows that Le Pen (dark blue) won the French Riviera. On top of that, 51% of French cops voted for Le Pen. The percentage goes above 60% for cops guarding the streets and above 70% among anti-terror-trained cops.

Hamon, the failed would-be socialist replacement for Hollande, has already recommended his voters to vote for Macron, and so did Sarkozy's would-be successor Fillon. The green Bolshevik whom the French public knows as a fake hologram didn't endorse either candidate in the second round. With some naive counting, you could say that one-half of Mélenchon's voters will vote for Le Pen but all of Fillon's voters will choose Macron, so Macron will win. Well, I don't think that this naive counting is trustworthy.

First of all, as The New York Times analyzes in some detail, the far left voters who were picking Mélenchon could overwhelmingly support Le Pen. After all, she is far left on many issues. Even more importantly, Mélenchon as well as Le Pen may be classified as "anti-establishment" and it's this adjective that could be more important than others.

And as my example might indicate, I actually do believe that many Fillon's voters will pick Le Pen in the second round. Fillon's recommendation isn't an obligation for his voters and many of them may be in the process of the transition from the old "mainstream" conservative party to a newer, more independent one, whether Fillon likes it or not. Moreover, many voters of the other candidates may decide not to vote in the second round at all – that would be likely to help Le Pen, too.

Macron may lose many voters because he's really colorless when it comes to the political ideas. He's just another master of empty clichés such as sentences about "innovation". That could fail to be enough to force his voters to vote again. Moreover, many voters will appreciate that his wife is 25 years older than he was – she used to be his teacher. I only learned about it yesterday. It wouldn't affect me too much and I am not quite sure about the sign of the influence but I would bet that it may become a net negative.

Václav Klaus Jr just asked on Twitter whether candidate Macron has already received the Nobel peace prize. They already seem to be delayed! :-)

So the mean value of my guess is 57-to-43 for Macron but the error margin is wide enough and I think that the Fortuna bookmakers are fair when they offer the 4.8-to-1 odds for Le Pen. (You pay X, then you get 4.8 X back if she wins; 3.8 X is the "profit", if I understand the counting well.)

The situation seems to be a "more extreme" counterpart of the Trump-vs-Hillary contest. An even greater number of pundits and people consider Le Pen an "extreme candidate" than in the case of Trump, and there might be reason. An even smaller number of people believe that she will win. Her protectionism and similar ideas and plans are even stronger than Trump's. And an even greater ensemble of journalists, analysts, and pundits would be proven wrong if she wins. But she may still win.

If she wins, I find it somewhat likely that the markets will panic and overreact. But even this assumption may turn out to be wrong. It was widely expected that the stock markets would go down if Trump were going to win – but they were going up, just like they should have been. Le Pen's policies are probably really more hurtful for the private sector than Trump's policies but I am no longer sure about any of these reactions and developments.

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