"As a nation, I think the biggest lesson that we learned is how important every single vote is. And if that isn't impetus for every person who has the right to vote, I don't know what is."
- James Nolan, executive vice president and CFO, United Trust Fund, Miami
In my October 15 column, I wrote that I would speak with you again in this space following the results of the presidential election. As they say in media circles, I'm still waiting for closure. Who could have anticipated the bizarre events that have unfolded since Nov. 7?
It was a surreal experience on election night. I felt like I was watching a seesaw gridiron matchup between the University of Michigan and Ohio State. A real barnburner. First, the TV networks declared Vice President Al Gore a winner in Florida. Then they changed their minds and said it was too close to call. Shortly after 2:15 a.m. Wednesday, Nov. 8, the networks crowned Texas Gov. George W. Bush as the president-elect, only to retract that statement a short time later.
Overtime Since then, I and millions of other Americans have become quite conversant about the finer points of the election process - the infamous butterfly ballot in Palm Beach County, Fla., hand counts and machine counts and their corresponding error rates, hanging chads on punch card ballots, the sunlight test, the Electoral College, and overseas absentee ballots.
Add in rancorous partisan rhetoric, an alleged attempt to circumvent the will of the people, a few TV-style town hall meetings, legal challenges on both the Democratic and Republican sides of the aisle, an assortment of historians and political pundits, and you have the makings of a four-star cable mini-series with an all-star cast. This is just what the ratings-starved cable news channels needed. It's their version of Sweeps Week.
As of this writing, Nov. 14, a week after the big vote, I'm still on the edge of my seat, waiting to hear who our next president will be. Regardless of which candidate tramples over the other to cross the goal line, the victory may be short-lived.
"I think there is going to be a four-year repercussion from this and it's going to be real simple," says James Nolan of Miami-based UTF. "No matter who wins the White House, he will not be held in the same high regard as a regular winner of an election.
"There's not going to be a federal agenda for the next four years," continues Nolan. "I think the next four years is going to be spent trying to figure out who is going to be the president in 2004. How can either candidate say he got a clear mandate from anyone?"
The South Floridian is fed up with both candidates, who he believes muddied the election process in Florida by making legal challenges. "As of right now, they are both losers. If either person would have taken the high ground and said, `Listen, let's go through the established process to wait and see the outcome,' then I think that candidate would have won [public sentiment] whether they won or lost the vote."
Effects on commercial real estate The fallout stemming from the election is a distraction from daily business in South Florida. Indeed, that's all everyone wants to talk about. "To me, this is even a bigger distraction than Elian," quips Nolan, referring to Elian Gonzalez, the 6-year-old Cuban boy rescued at sea in November 1999, and brought to the United States.
What impact this stalemate will have on capital markets in the long run remains uncertain, but Nolan's view is that the debt market is less vulnerable. "I think that the debt market is pretty solid. I didn't see any fluctuations in the past couple of days, one way or the other. The debt market really takes into account current and long-term economics. I don't think either one of these candidates is bringing something to the table to change that."
The equity market, however, is experiencing uncertainty and volatility. Wall Street does not look favorably on uncertainty. The doubts surrounding this election only fuel the fire.
"We've been on a cliff for some time now," observes Nolan. "It's amazing that we've had nine consecutive prosperous years. You know that eventually something's got to change. Even before the election I saw a major change in the investment community, predominantly centered in Internet and dot.coms. As those stocks were revalued, so was the rest of the market.
"We're getting back to the fundamentals of earnings multiples and real valuations," continues Nolan. "There has been a lot of excesses wrung out of the market, certainly in the last four or five months. Even the better stocks are being hammered right now."
So, too, are Gore and Bush in the arena of public opinion.