Markets politics

‘Volfefe’ And The Peaceable Passing Of Power

If Donald Trump was trying to raise (more) eyebrows by refusing to commit, explicitly, to a peaceful transfer of power should he lose the election, he certainly succeeded. His Wednesday afternoon remarks were a trending topic Thursday.

As ever, it’s not clear that what the president said was actually “news”. And that speaks to just how far afield America is. Although we shouldn’t normalize the behavior, it’s hard to imagine Trump responding any differently when asked about a close election. His standard reply (and not just to this question) is “we’ll see what happens”. He’s also rolled out that response when asked about North Korea’s nuclear program, war with Iran, and slapping tariffs on the entirety of Chinese imports.

That said, the president revels in divisive politics, so it’s entirely possible he was deliberately stirring the proverbial pot Wednesday. He needs controversy like a fire needs oxygen. His Twitter account is a testament to that.

Indeed, JPMorgan is back to talking about its proprietary “Volfefe Index“, named for Trump’s infamous “covfefe” gibberish tweet, and rolled out last year to measure the effect of Trump’s social media bombast on rates volatility.

When the bank unveiled the gauge one year ago this month, Josh Younger and Munier Salem ranked how frequently certain key words appeared in market-moving tweets from the president. Topping the list at the time were “China”, “Billions”, “Products”, “Democrats”, “Great”, “Dollars”, “Tariffs”, “Country”, “Mueller”, “Border”, “President”, “People”, “Korea”, “Party”, “Years”, “Farmers”, “Going”, “Trade”, and, of course, “Never”.

This is yet another situation in which the undeniably comedic nature of Trump’s shenanigans belies the existential crisis created by the same autocratic tomfoolery.

Younger and Salem constructed the “Volfefe” index with the help of their “trained tweet classifier” which, according to the original study, allowed the bank to “produce an inferred probability that each tweet is market-moving by 0.5bp+ in the next five minutes”.

In 2020, tweets containing pandemic-related key words such as “ventilators” moved markets more than (virtual) shouting about “China” and the trade war. Although the impact has waned, “presidential tweeting remains a statistically significant driver of volatility and options pricing in interest rates”, Younger says, before noting that if Trump’s “pronouncements” between now and November begin to skew heavily towards COVID and the election, “it could be a bullish factor for volatility”.

This sounds absurd, and to a certain extent it is, but remember that Twitter has been forced to take steps recently to protect the public from misinformation posted by the president and some of his allies.

Facebook, meanwhile, is working on a number of what the platform’s Nick Clegg this week described as “break-glass options” in the event the US descends into anarchy. During an interview with The Financial Times, Clegg described measures the company may take “if there really is an extremely chaotic and, worse still, violent set of circumstances”.

It goes without saying (or at least it should), that Trump will likely live-tweet the results on election night, even as he knows the outcome won’t be decided for weeks. If it’s a landslide and he decides to challenge the results as fraudulent, he’ll probably preview that on Twitter too. On Wednesday, Trump said he expects a Supreme Court battle. In the same remarks, he emphasized how important it is to get his nominee confirmed ahead of November. It’s certainly not a stretch to suggest the president will allude (or already has) to a quid pro quo with the nominee — i.e., I put you on the high court, and you cast the swing vote for me if it comes to that.

On Thursday, lawmakers on both sides of the aisle were at pains to explain away or denounce (depending on party affiliation) Trump’s noncommittal response to Wednesday’s question about peaceably leaving office.

“There will be an orderly transition just as there has been every four years since 1792”, Mitch McConnell tweeted.

“Any suggestion that a president might not respect this Constitutional guarantee is both unthinkable and unacceptable”, Mitt Romney said, without even a hint of irony to account for the fact that his support for rushing a new SCOTUS nominee to the bench may facilitate this “unthinkable” outcome.

“As we have done for over two centuries we will have a legitimate election”, Marco Rubio promised. “It may take longer than usual to know the outcome, but… at noon on January 20, 2021 we will peacefully swear in the president”.

Richard Shelby sounded less sure. “We’ve always had a peaceful transfer of power… and I think this year will be no exception”, he said.

Chuck Schumer, speaking on the Senate floor, called Trump’s remarks “unbelievable”, while Ben Sasse tried to shrug it off: “He says crazy stuff”.

He sure does, congressman. He sure does.


18 comments on “‘Volfefe’ And The Peaceable Passing Of Power

  1. prellim31 says:

    The artwork is genius…odd times these….

  2. Alex says:

    Every GOP Senator must have done a line of the Volfefe they sure talk like their stoned.

  3. This is the same bunch that used to back a semi-respectable candidate for the nomination in early 2016, and now cower before the dictator wannabe.

  4. runamok says:

    Thank goodness we have the Fed to keep markets from tanking from election night on to inauguration day, assuming that inauguration day isn’t cancelled. The Fed still has like $5T they can throw at the markets, so we should be ok for a while.

    So, does anyone know when the Senate and Trump are going to deep-six Social Security Income and end the program?

  5. Drake Dayton says:

    Dumb question mr H,

    Wouldn’t the 3 new justices have recuse themselves? Seems to be a obvious conflict of interest to me. I’m no lawyer.

    • dayjob says:

      Should they? Yes. Will they? Definitely not. The days when conservatives cared about their own conflicts of interest are long gone and there is nothing in the constitution that explicitly requires them to do so. Trump has fully disavowed us of the notion that norms matter. He made that pretty clear when he talked about how not paying taxes makes him smart, so as much as we’d like to think that everyone has agreed to some basic ground rules, we can’t assume that to be the case anymore.

      That being said, I still have a very hard time imagining it getting to that point.

      • joesailboat says:

        What is a Conservative nowadays?
        I guess we will find out. They actually did not exist when the Constitution was written or they were Tories.
        When I was young my Father pounded into my head what it meant and this has not been it.

        • dayjob says:

          That’s a good question. Most of the people who claim to take up the mantle of conservatism are anything but. Trump has totally upended the Republican party, and it’s clearly not a party that can be defined by a consistent set of guiding principles or policy anymore (except maybe with regards to abortion and the second amendment). If anything, the moderate wing of the democratic party is what most of the developed world considers conservative these days.

    • No. 🙂 But yes, the conflict is glaring. And I would again contend that it is highly likely that Trump has hinted at a quid pro quo with his nominee. I don’t think that’s a partisan statement at all, either. It just seems like common sense.

      • joesailboat says:

        Some on the Christian right might become less needy of him now that he has delivered the Court. I do recall some Christians begrudgingly voted him last time. Biden is no Hillary.

        • I think that you give the Christian Right too much credit. They are all aboard with Trump.

          Don’t kid yourself, racism and sexism plays quite well with most Evangelicals.

          • Mr. Lucky says:

            Agreed. Remember most of our founding fathers were very conservative puritans and other “right wing” Christians who kept slaves (who weren’t people, after all) and prohibited women from voting, owning property or otherwise having freedoms equal to men.

  6. Ria says:

    This is increasingly looking like a blowout election against Trump. If it turns out to resemble close, it is going to be a very awful fall and winter. Mix in civil unrest due to violations against citizens and protesters and add a pandemic and you have the danger of a breakdown of civil society. It is a tail risk for sure.

    • mfn says:

      I think this is the correct read. All we get from MSM is pictures of a frail Biden and Trump in front of roaring MAGA crowds. But take Trump out of the bubble of his adoring idiots and drop him anywhere that is not a Trump-owned country club and what happens? He is booed passionately and at length. People hate this guy like no politician in my lifetime — including Richard Nixon and George Wallace.

    • derek says:

      Gov Ron DeSantis already pre-announced his proposal to open demonstrators to felony charges if things get out of hand.

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