politics stocks

When The Count Is Finished

Donald Trump’s path to reelection narrowed further on Friday as vote counting continued in key states and Joe Biden took the lead in Georgia.

It now appears that Biden will end up ahead in both Pennsylvania and The Peach State. With the obligatory caveat that “it ain’t over ’til it’s over” — it’s probably over. Or “it’s all over but the shouting,” as they say.

And Trump is doing a lot of shouting, that’s for sure. His press conference on Thursday evening was so egregious that the main networks cut away when the president began making manifestly false accusations without offering evidence. There’s little utility in going over his assertions. They aren’t true. In some cases, it’s not even clear what the president is asserting.

Biden knows it’s over. “We have no doubt when the count is finished, Senator Harris and I will be declared the winners,” he said.

The raucous rally which, coming into Friday, found the Nasdaq 100 within spitting distance of its best week of 2020 and the S&P up more than 7%, looked poised for a bit of breather. At the least, equities globally looked more than content to coast into the weekend with big gains considering how things “could have gone,” if you will.

“At least the market has a narrative: A Democrat President who doesn’t control the Senate, will be less combative on trade, but will be more limited where fiscal policy is concerned,” SocGen’s Kit Juckes said Friday, recapping. “This leaves a bigger role for the Federal Reserve, which means even lower rates for longer, even more QE for longer,” he added. “So the dollar is weaker, spreads are tight, equities have rallied around the world this week and volatility is (even) lower than it was.”

Note that control of the Senate is not a foregone conclusion. That may not be decided for months. But, as noted here on multiple occasions Wednesday and Thursday (see “No Surrender“), Democrats’ underwhelming performance in Senate and House races (against perhaps inflated expectations) suggests that even if, by some miracle, they did manage to flip the Senate, they are not playing with a particularly strong hand. Biden, though, has a reputation for bipartisanship, which could be construed as either bullish for getting things done, or, conceivably, bearish, to the extent he’ll be more inclined to concede ground to recalcitrant Republicans if it means getting something done, where “something” may often mean piecemeal legislation and half-measures.

The virus continues to rage out of control. The US is now the not-so-proud owner of a wholly dubious distinction: The country is the first globally to log 100,000 or more cases in a single day. I sincerely hope it’s not lost on anyone that Trump, at rally after rally, insisted the country is “rounding the turn.” In fact, COVID-19 is spreading rapidly in part (not entirely, but in part) due to gross crisis mismanagement at the federal level.

France is in all kinds of trouble. The country reported 58,046 new cases in what Health Minister Olivier Veran called a “violent” second wave. 85% of French ICU capacity is now devoted to COVID-19 patients. Paris has closed down food-delivery and takeout service from 10 PM to 6 AM, underscoring the severity of the situation.

ICU capacity is nearly exhausted in Hungary, while Poland logged a record 445 daily fatalities. 72 people died of the virus in Austria, a record. Reports out of Russia suggest multiple regions are facing an acute situation as hospitals struggle to handle patients. Speculation is also building about Vladimir Putin’s health. Unverified reports from a handful of notoriously unreliable media outlets suggest he may have Parkinson’s Disease. I’ll mention that only in passing until a credible media source takes a closer look.

In any event, barring a complete meltdown, US equities will escape election week with large gains. Trump, on the other hand, did not look poised to escape with the presidency. He promised “tremendous” litigation on Thursday evening.

Expect calls for the Republican leadership to intervene. The GOP will be understandably reluctant. It’s perilous to turn on a leader with autocratic tendencies when he looks vulnerable. If, by some unforeseen turn of events, he manages to hold onto power, you won’t want to be the guy or gal who tried to convince him to concede.


 

22 comments on “When The Count Is Finished

  1. Looks more by the minute that president Biden will become a reality, and honestly with a GOP senate or not the markets will likely perform well into 2021 (unless Trump decides it is time for Handmaids Tale to become a reality). This country, however, will not recover in my opinion. The die has been cast, the blow to the rule of law and our democratic institutions has been strong enough to harm the foundations of the system, the end of our empire is inevitable and in sight, the questions remaining are how painful that ending will be and how long it will take before democracy finally crumbles and we become something else. Today I’m glad all indicates that Trump will lose, I’m also very glad I have no children.

    • John Banjo says:

      “the blow to the rule of law and our democratic institutions has been strong enough to harm the foundations of the system” – this critical issue will determine the degree of recovery we as a country can achieve.

      I fear the dems will have seen their margins shrink and blame it on their impeachment effort and let all the criminals off the hook as a result, ie no recovery, just reinforcement.

      Ford pardoned Nixon, HW Bush pardoned all the Iran Contra criminals (Barr was AG), Trump will be pardoning many if he leaves the office. Will the memories remain?

  2. Strangely, I don’t share the long-term pessimism of the previous poster. It would be foolish to discount the support Trump’s Keystone Kops authoritarianism has either generated or exposed. And there is absolutely a similar tendency on the Left, though masked in bromides about Edenic outcomes. In some way I believe the US will muddle through.

    What’s less surprising is the markets. The red diaper baby professors who taught me sconomics and social science would have a ready explanation. So, too, would V.I. Lenin. That’s not comforting. Yet while I stumble across people of sound character, it seems the market places a value on that of exactly $0.

    If that’s so, it’s where the real danger ultimately lies.

    P.S. I have kids and had them after age 45. It helps diminish one’s (or my) tendency to lean to the dark side.

    • I couldn’t agree with you more, the US always muddles through, and then some… I too, have a kid, and that never diminishes my optimism. While, yes sound character is often undervalued, it comes through in the end.

    • DoubleB says:

      I agree with you. It’s possible Trumpism manifests in deep, dark ways that threaten this republic. But we all seem to forget that this country has had contested elections (see 1876 for starters), mass protests and even a Civil War. And yet it has muddled through and my guess will continue to do so.

    • runamok says:

      Watching a video or reading some about the Sloan Digital Sky Survey puts a perspective on our situation.

      There are no guarantees of outcome with countries. The US is not an anointed country, approved by some unknowable power, to be forever peaceful, leading, and able to co-exist with ourselves, and able to defeat all challengers. The shining light on the hill worked during the period of post-WWII institutions, during the period of peace in which we are all fortunate to have been raised in. We are lucky to be living in the time we are.

      One thesis for our how the US turns out is the Latin America Democracy. The people with money live in gated communities. They have what they need. They don’t come into contact with people who are hungry, poor, living on the streets, and generally leading lives of despair. At night the people who live in these communities don’t venture outside the gate.

      We can lose what we have. The moral code that allows us to be ok leaving half the population behind is not ok. I would propose that we are currently testing the Latin American Democracy thesis right now, with the relatively wealthy people doing ok, living at home, getting what we need from Amazon and Instacart, while the less the fortunate face the danger of getting beat up for the few objects they might have in their pack.

      And, please don’t foust upon us here on this board the worn-out of trope of blaming red diaper baby professors for our nation’s collective, moral failures.

      For those seeking a rational read that is optimistic about the American future, refer to George Friedman’s “The Storm Before the Calm.”

    • PJSPHD says:

      I think precedent is lost on both sides. Does GOP really want a world where Presidents ignore the law with impunity. Let’s say AOC becomes President in 8 years. Do they want her to ignore subpoenas and get away with it? Do they want her to shoot someone 5th Avenue and walk away? The more Trump flaunts the constitution, the greater the possibility his actions become normalized behavior for ALL future Presidents.

      Karma, reap what you sew, what goes around…It has a thousand names.

  3. joesailboat says:

    Fox and Murdoch will announce the end of Trump and the Republicans will get on board because Fox is letting McConnell know who runs the show. It looks like Nikki Haley in four years

  4. Emptynester says:

    The technology exists for secure electronic voting. See Switzerland.
    Now is the time to get this in place.

  5. Ria says:

    It turned out ok, but by the skin of our teeth. The results in the House and Senate are a disappointment, but I will take it. The difficulty will be when the Supreme Court throws down an obnoxious ruling- it will happen within the next 2 years. Then the bloom will go off the rose in living in a red state for many. In the meantime the markets are in the process of moving on from the election. It is going to be back to watching virus news both good and bad, as well as parsing what it is going on around the country and the world. That is a healthy outcome- lets worry about our fellow man and hope that things continue to work out ok for many…

  6. dayjob says:

    It may be a small thing, but this quote stood out to me: “We have no doubt when the count is finished, Senator Harris and I will be declared the winners.” Notice how he included Senator Harris. That single statement demonstrates the difference between Biden and Trump.

    We’ve still got a lot of work in front of us, but we always find a way to muddle through. I saw that Ted Cruz and Lindsey Graham took the Trump bootlicking route in propagating Trump’s baseless fraud claims. Fortunately, I don’t think either of those has the chops to take over the authoritarian baton from Trump. I haven’t seen anything from the likes of Tom Cotton, but he’s the type to keep an eye on.

  7. John Banjo says:

    Optimism Pessimism meters fluctuate. Relieved that Biden won, happy about Georgia, Arizona, Minnesota, and rest of the Midwest that eeked back to the dems. Extremely disappointed with House and Senate. It seems there is some equivalent of the Stockholm Syndrome typified in the American Voting public. Reminds me of 1976 when Gerry Ford came within a whisker of defeating Jimmy Carter. Ford of course pardoned Nixon who is Trump Lite, but back then was criminal and scandalous when America society valued legal and ethical issues very seriously.

    As for the future I’m cynical, less so with Biden’s win. McConnell will obstruct on every level, and why not, he has been validated with this pattern of behavior. I continue to harp back to 2000, when a president was “elected” despite losing the popular vote in a democracy, in times of surplus, wealth, and peace. A botched national security issue later surplus, wealth, and peace wasted with new perpetual worldwide warfare, instead of sowing economic goodwill that could have lifted others up and surrounded out the semblance of evil acting, negativity, and wealth disparity / inequality.

    When the Rise and Fall of the American Empire is written, the year 2000 will be momentous.

    Appreciate H and our Group.
    Cheers

    • runamok says:

      Among my circle of homeys, we do periodically reference 2000.

      We don’t know which elections outcomes will matter most, but when they do matter, the difference is a non-linear function. Dare I use the word “convexity” to describe the character of one outcome to another. There must be at least two or three books written about this.

    • joesailboat says:

      The day we authorized the invasion of Iraq was the beginning of the end of the American Empire. Obama managed a holding pattern and I wish at least the same for Biden.
      . I am hoping for enough time so that a newer generation takes the lead. This election was an eye opener.

      • John Banjo says:

        and sadly Joe Biden voted to authorize the war when over half of the developed world’s population knew it was based upon lies and greed. Of course Obama capitalized on Hillary’s support of the war vote to win the democratic nomination, barely … at least it mattered at that time. Nowadays there is very little longterm memory utilization that contributes to peoples’ critical political thinking and development.

        I see the Iraq tragedy / war as a continuation from 2000.

  8. Bob says:

    Shortly after Caligula you had Claudius. So who will be Nero…

  9. WPG says:

    I’m worried about the impact of an out-of-work Trump on Biden’s time (however long that may be before it becomes Harris’ time, a subject for a future Prof. H treatise I hope). I do not believe he will do as his predecessors, and like the Cheshire Cat fade away.
    If Trump is dragged through the courts, there will be no end to it. A pardon (like Nixon) may be the lesser of two evils.

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