Why Charles Gave Expects "Total Mayhem" In France Even If Macron Is Elected

Tyler Durden's picture

Venerable French investor Charles Gave has been managing money and researching markets for over 40 years; as such France’s elder statesman of asset allocation perhaps best captures the mood ahead of the most crucial Presidential election in a generation. In conversation with Dr. Pippa Malmgren, Charles breaks down national politics to understand why voters have rejected the establishment and the market impact of both outcomes, and what to expect from tomorrow's election.

First, Gave, who says "I'm not so sure that Macron will win", is asked by Malmgren to walk RealVision viewers through what Macron's agenda would look like in case of a victory. Gave is unable to do so for several simple reasons:

Well, first, nobody knows. Because during the whole campaign, all these talks were on one hand, on the other. I'm in favor of apple pie, and motherhood, you see. Basically he has, to my knowledge, very little program. So he's running. That is what Hollande said. That he was going to make some fundamental changes without hurting people. And so Macron is a big, empty suit. That's what he is. You did the right curriculum vitae, he went to the right schools. And you have the feeling that the guy never had an original idea in his life. He was always a good student.


And moreover, there is a strong suspicion that he's a kind of golem created by Hollande and all these guys. So since they knew they were going to lose the election, they created a guy in a hologram that would run for them and prevent them from losing power. So to a certain extent, the French political system has been captured by what you can call the Technocratic class. And whether from the left or the right, it didn't make any difference. And this Technocratic class is presenting Macron as a brand new fellow. He is nothing brand new. These guys have been in power for 50 years for God's sakes. So this is basically nothing.

Gave is then asked for his take on the market's reaction, first to the outcome which now appears to be fully priced in, i.e., a Macron victory. The French investor's response should be concerning to those who believe France is in for a period of calm and stability.

If Macron is elected, as I already said, I'm not sure it's not going to be a triumphant election. So I'm not sure they will have that much legitimacy at first. And second thing is that just after, we have the election for the French Parliament. And then it's going to be a total mayhem. Because you have four main different currents in France. The extreme left, the Macron left, you see? You have the Fillon right, and you have Le Pen's right. So you have four. The way it's done before is that you had only three. Extreme left and the left were joined. And you had the election, you had three guys, and if anyone from the Front National had any chance of being elected, then the worst position of the other two retired. Right away. And said, you must vote for my usual enemy, but we don't want to. It’s what’s called the Front Republic.


But you see, it's kind of easy to organize if the organization of the parties are very strong and can force people to retire and to stop running. But if you have four, the organization of the parties having lost all credibility, then nobody is going to retire. Until we are going to have elections. And you could have a majority of MP's from the Front National The majority of MP's from Melenchen. Anything is possible. So the fact that Macron is elected doesn't reduce at all. Not at all. The political risk in France. It may reappear at the election time, big time. So anybody who buys on the idea that the problem is solved in France, let’s move to the next one will have to wait till the middle of June.

Alternatively, what if Le Pen wins:

If Le Pen wins, it's pretty simple. The bond market in France, Italy, Spain cannot open on Monday morning. And I suppose the euro is dead in the following week. And then you have to buy Europe like crazy. Southern Europe.

Why Southern Europe? Because it is Germany's markets that would bear the brunt of the selloff, as the dissolution of the euro and European Union would effectively bring about the end of Germany's economic hegemony (while at the same time benefitting France).

The Germans have made a colossal mistake, which is that they have all the production in Germany. So they're extremely efficient, well-organized, and they have developed massive current account surpluses. Half of that surplus is in cars. The margin on cars is around 4%. Imagine that the euro breaks down. The deutschmark comes back. The deutschmark goes up 15, 20%. And the whole German industry, all the production base in Germany, becomes bankrupt in no time at all. Compare that to France. France we have magnificent big companies that have been intelligent enough to produce everywhere in the world, to operate from everywhere in the world, and be totally independent from what's happening in France. What they have in France is their headquarters. And that's about it. So if Europe breaks, you should be long France on the stock market, and short Germany. Big time.

Would a Le Pen victory also mean the end of the EU? Gave answers:

I wrote a book in 2002, sometime around then, called "Lions Led by Donkeys in France." It was kind of a bestseller. And I made the point in the book that the euro is going to destroy Europe, the European institutions. And I said, we must get rid of the euro to save Europe. So name of the game, if we have some kind of a crisis like that, is to basically close the market for three weeks and organize an orderly dismembering of the euro. But to maintain what has been good so far, which is the kind of common market. And it's a difficult call because the movement towards the euro was also a movement to create a European nation.


And so the institutions today are basically federal in nature. But nobody in Europe has ever voted for them. So to a certain extent, the guys with power in Brussels have not been elected by anybody, and you cannot fire them. So it's totally Technocratic. So we have a hell of a problem. We should not only destroy the euro, but should move back to what Europe was in 1988 or 1987 before they put all these Federalist legislations in. That is going to be a tall order. But if the euro disappears and Europe has a problem, then the negotiating between the UK and Europe is going to be amusing. Because UK is going to say, look, who are we going to negotiate with?

Finally, on his big picture thoughts ahead of tomorrow's decisive election:"it's going to be a close call, a lot closer than people think. And then we have the elections afterwards, which are going to be a total gamble." Gave adds that in a sense Le Pen has already won because the "worst case scenario" for her, the 2022 elections, is still achievable. As for the parliamentary elections, "Le Pen could have anywhere between 40 to 100 MP's (she currently has two).... which would be a total disaster for the ruling class."

In other words, even if Macron triumphs on Sunday, "the National Front isn't going anywhere." Furthermore, Le Pen's niece Marion Le Pen is poised to inherit the mantle of party leadership in time for the next presidential election in 2022. The younger Le Pen, already a French MP, would have a distinct advantage over her astringent aunt:

Marion, she's very young. She's 27, 28. She's an MP in the French Parliament. She's extremely pretty. And she represents what's probably very good in the French Catholic Right. She's very much a Christian person. Very much so. So a lot of people have problems voting for Mrs. Le Pen today. A lot of the Fillon's elector would have absolutely no problem voting for Marion, you see what I mean? So she has a big appeal on the Classical French Right. Big one. Big one.

His parting words:"be careful. If she wins, you will have a disaster in the lot of the European bond market. Doesn't mean a total disaster for the good quality companies. But the risk is not on the stock market. The risk is on the bond market. So be careful. Don't overstay on the bonds in Europe."

While these are the core excerpts from the interview with Charles Gave, there is much more in the full 40 minute version found on RealVision TV.

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alter_'s picture

Once everyone confirms all the hacked documents are legitimate and realize Macron really is a lying theiving corrupt banker tax-cheat, they will riot. Can't wait. France deserves it if they don't elect Le Pen.

Sudden Debt's picture

Indeed. I have faith that the French will elect Le Pen. On the internet here, there's an all out battle for the votes and Le Pen is really dominating this playingfield.


froze25's picture

So Le Pen win = massive dollar strengthening?

knukles's picture

So the Russians hacked the French to find out whether they really liked Jerry Lewis or it was a put on?

dilligaff's picture

So, gold price down?  I'm so fucking confused...

jmack's picture

gold is down because  the polls say le pen has no chance in hell of winning.   Pluse, why buy gold when US stocks are guaranteed to go up by the full faith and credit of the federal reserve?

Ajax-1's picture

Le Pen victory====>Gold/Silver gets hammered

Macron victory===>Gold/Silver gets hammered

TRANSLATION: Heads I win, Tails you lose. The fix is in for the Banksters.

Embers Oaken's picture

Don't be taken in by the echo chamber. The majority of French people are insular and don't read English language websites. With the crackdown on the reporting Macron's corruption, most French voters will not know.

Scanderbeg's picture

Doesn't matter. Globalism and neo liberalism are in their death throes. They are simply delaying the inevitable. Front Nationale will take power in five years if not now. 

The Zio Cons have over played their hand with hyper mass migration and cultural Marxism. There is a furious right wing reaction brewing all over the west. If it is war they want than they shall get it. But this time it will be settled for good.



Uncle Sugar's picture

Anyone else notice the abundance of interracial couples in US tv commercials lately?  Full court press to meld public thought.

Ajax-1's picture

Yes, I have noticed that for several years now. In addition, the advertising propogandist go out of their way to portray the white heterosexual male in a bad light. I think it would be interesting if someone put together a singular YouTube collage of various advertising videos to demonstrate this reality.

koan's picture

They won't do shit, just as they haven't shit about the Muslim trash coming into their country.

France is dead.

alter_'s picture

Either they will riot or the new Muslim "french" who are rapidly replacing the native French will. One way or another there will be rioting.

. . . _ _ _ . . .'s picture

France may be dead, but the French are not.

veritas semper vinces's picture

I think France is going to have a revolution soon.Probably followed by Italy.The French have had massive protests in the streets for a few years now.

They intellectuals/opposition know exactely what's going on,

Even if Macron wins or is shoveled down their throats,he will not be able to govern,he has not party support,he will need to make a lot of coalitions .

j0nx's picture

Kinda like trump then? His own party doesn't even support him and so far he lets them get away with it.

Ajax-1's picture

The French are way too pussyfied to take their country back. French culture is dead and they don't even know it.

cossack55's picture

I really rather hope not.  I love France and Paris is the only city in the world that I would ever consider acturally living in.  If MLP wins, I may go back soon.

Peterman333's picture

I would strongly advise you NOT to do that.

Peterman333's picture

The Republic is dead, yes. agree 100%

The French monarchy was around for 1200 years at least, the Ray-poob-leek has only been around for about 220 years give or take some Napoleonic years, it's the deviation, not the norm. What you will see soon and what not one, not a single one of these "experts" see coming is a return to the norm.

Vive Le Sainte Royaume de France!

brain_glitch's picture

"Charles breaks down national politics to understand why voters have rejected the establishment"

Since when voting for one of the puppets is rejecting the establishment? Just look at what anti establishment Trump has turned into FFS.

Voting is the establishment's game. "You are free to vote for A or B!"

If voting could change anything it would be forbiden.

Matteo S.'s picture

You don't realize that Marine Le Pen is a poor political leader. Macron is a globalist but he is much smarter than her. This is what Charles Gave is understating.

Marine Le Pen is a socialist. Her main lieutenant is a former leftist and a socialist statist.

Her niece Marion Marechal Le Pen is a true conservative and a nationalist with much more brains, guts and vision.

New_Meat's picture

apres moi, le deluge

Sudden Debt's picture

Good point!

Why should England pay 100 billion to a non elected government without real citizens or even a land?

European technocrats that decided they where a country owned by others?

Europe doesn't really exist without the countries that make it up.

So without concent of the countries, England for example, they don't even exist.

In a funny way, it's English non elected Europarlementarians who are bribing England as they also have politicians in the crime syndicate.


This is all such a joke...

ciscokid's picture

It's United Kingdom mate.And we are not going to pay a f...cking penny.

froze25's picture

Good, you shouldn't. F' the technocrats. 

zippedydoodah's picture

Evidently those bloody Flemish and Walloons don't even know what country they are dealing with.

koan's picture

Yep and the jokes on us.

Pandelis's picture

well not really a joke.  if you want to bring down a country thats how you do it... dont sk me why... ask theresa may, she is claiming the small country of luxenburg is conspiring against her  not sure just because he wants power... because who is he anyway

ciscokid's picture

Le Pen will be the only one who can save France and Europe in that matter.

Kefeer's picture

Trump will be the ony one who can save America and the United States in that matter.


Does that make any sense?  Naw.

BlindMonkey's picture

Of the candidates for President in 2016, Trump was the only possible choice that could save America.  Period.


The fact that he won't/can't is irrelevant as there was NEVER a chance the other choice was going to save America. 

BarkingCat's picture

You mean from the choices presented by the Democratic and Republican parties.


I am certain that there was a third party candidate that was far superior to Trump.

I recall sometime ago watching a third party debate on TV and every one of those people was better than the R or D choice.

Too bad that they cannot get any traction....although in reality Trump was a 3rd party candidate just as was Sanders.

MrSteve's picture

Clinton and the DNC ruined Sanders' election sure as any Rooskie ruined Hillary's shot at winning the election. With Axelrod turning on HRC now, that whole movement s cooked. DNC is more corrupt than Kremlin's crooks.

veritas semper vinces's picture

America can not be saved,especially by voting

geno-econ's picture

America can be saved if we cooperate with the Russians and Chinese.  Otherwise, no one wins. 

New_Meat's picture

there is "save" and there is "saving"

Charles Martel is in the wings

veritas semper vinces's picture

I feel the same. I think France will lead the fight for European freedom(closely followed by Italy)

Kefeer's picture

I wonder what God will do; He puts all in authority - even your mother was gift.

. . . _ _ _ . . .'s picture

God will do what God has always done - sweet fuck all.

Kefeer's picture

What god is that?  Must be your imagination running amuck.  Are you one of those Nothing + nothing = everything created?  To which I would say; who or what created nothing? :)

. . . _ _ _ . . .'s picture

I'm not gonna' get into your creationistic claptrap.

If you don't understand physics... not my problem.

If you want to put forward a theory that God exists, the burden of proof is on you, not on me to disprove what you say.

There has never been any more proof of God than there has of aliens.

Go back to praying for Armageddon, and then think about why the world is so messed up.

I respect anyone's right to believe what they want, but not to impose it on others.

Doubt you feel the same way.

None so judgmental as a believer, ironically enough.

Imagination is your best friend. I deal in fact.

Kefeer's picture

God as creator does not need to be proved.  It is a simple as: if you are a creature, living in a creation, then you have a Creator.

Furthermore, logic and reason dictate that there is a creator that has always existed among many other one-of-a-kind attributes according to the Law of Cause and Effect, with the creation being the effect with a first cause being what we call "god".

Foolishness to those who are perishing and the power of God to those who are not.

You cannot disprove a creator, but the evidence of a creator is as close as the next mirror.


You sound like an atheist or agnostic; leaning toward atheist - a fools religion at best.

. . . _ _ _ . . .'s picture

There you go judging again. Isn't that blasphemy?

Only a fool needs a religion. I am not an atheist, I am an anti-theist.

All your arguments are based on supposition. You wouldn't know logic if it went and explained evolution to you.

Believe what you want, I don't care.

"So that it is evident, that whatsoever we believe, upon no other reason, than what is drawn from authority of men onely, and their writings; whether they be sent from God or not, is Faith in men onely." -Hobbes

Kefeer's picture

You are already "imposing" to a higher degree than I did, but hey there is no logic with the atheist; that is the first casualty of that religion.


No worries it is beyond your capacity as it once was myself.


The natural person does not accept the things of the Spirit of God, for they are folly to him, and he is not able to understand them because they are spiritually discerned.

John_Coltrane's picture

Here's a riddle for the true believer, one who suspended reason and relies only on faith,

If God created the universe who created God?

Easy: Man

On the other hand every time an electron makes a transition in any atom, something, a photon, is created out of nothing. There are countless examples of something being created out of nothing and something going back to nothing (a photon being absorbed by an atom) and unlike God their effects are observable and testable.

Victor999's picture

"On the other hand every time an electron makes a transition in any atom, something, a photon, is created out of nothing. There are countless examples of something being created out of nothing and something going back to nothing (a photon being absorbed by an atom"


Sorry to burst your bubble, but nothing is being created or destroyed as you say.  The Law of Conservation of Energy refutes everything you say in this statement.  Matter and energy are interchangeable.