To my not very great surprise Mike Pence has indicated that he’ll be counting the electoral votes as presented. While there will be objections to various states’ electors those are unlikely to be sustained by either the House or the Senate. Which will mean that, likely by the end of today, Joe Biden will be President elect and Trump will be packing up his White House.
I have never been an all in Trumpist. When he was elected I supported him simply because Hillary was so dreadful. Biden is not nearly as dreadful and, while I will miss Trump’s anti-Swamp activities, the election of the thoroughly corrupt Biden is, in itself, a major disaster. Biden will nod along and the assorted loons in the Democratic party will fight among themselves.
What is a disaster is the fact that there was, apparently, nothing either Trump nor the Republican Party could do about the rampant cheating which led to Biden’s astonishing vote. Ballots in the night, the Dominion voting machines’ algorithms, the dead, non-resident and illegals voting, the mass mailing of ballots: nothing moved the needle.
The needle stayed put because the American media had absolutely no interest in what was and is the most significant political story of my lifetime. Not because they loved Joe Biden, rather because they hated Donald Trump and the people who supported him.
As I write the hundreds of thousands of Trump supporters who have flooded into Washington are, apparently, breaching the Capitol Building grounds. Where that goes will be interesting. Right thinking bow tie Republicans will see this as “deplorable” and it is. But the complete bad faith of the American ruling elite, the corruption of the voting systems, the resolute unwillingness of the Courts to hear actual evidence and the failure of the Vice President to find a way forward leaves those deplorables with very few choices.
They are inside the Capitol now and both the House and the Senate are recessed. This is not the day Joe Biden will be President Elect.
We’ll see how this turns out: there is a fair bit of shouting left to be done in Washington.
Update: It looks like the Capitol has been cleared and the Joint Session has recommenced. The great and the good have deplored “violence” and “riot” and Twitter has suspended President Trump’s account.
Unfortunately, a woman was shot and killed at the Capitol. Exactly how and by whom is unknown.
Washington insiders have closed ranks to push Biden across the line. Functionally, this should be enough to have him achieve a Presidency of a sort. Biden will start with the asterisk of a stolen election and an absence of any real personal support. There will be no inauguration parade and, I suspect, citing COVID and security, the actual swearing in will take place behind closed doors.
Will Trump retreat to the golf course and lick his wounds? Perhaps, for a while; but everything I have seen suggests that Trump will be back.
The American Presidential election has fully entered its litigation phase with Trump aligned and non-partisan lawyers filing suit at the state level, gathering evidence of improper procedures and outright ballot box stuffing (physical and electronic) while various Democrat supporters, some establishment Republicans and the entire mainstream media maintain there is no evidence of “any” or “widespread” or “fraud at a scale which would change the outcome. There is all sorts of evidence suggesting that ballots, ballot envelopes and even voting machines are being shredded. Attempts to conduct audits of absentee ballots or mail in ballots or military ballots are being stymied. And so on
All of which is pretty normal course for an American election. American elections are administered under state election laws and those laws reflect the various constitutions of the states. It comes as no surprise that in some cities in some states there are attempts to count ballots which may not have been properly cast. Nor is it surprising that advantage was taken of states which have not tended their voters lists very carefully. These an many other irregularities are, rightly, the subject of litigation. So are broader claims of systemic electronic fraud effecting entire states. All of these claims need to be heard and adjudicated.
If everything works according to plan then the litigation will be settled in the next week or so, although there are no magic dates here as the Supreme Court ruled on Bush v. Gore on December 12, the safe harbour date for the return of electors due to meet on December 18. The dates this year are slightly different but, ion extraordinary circumstances even the meeting of electors date could be pushed.
The outcome of the various cases being pursued is impossible to predict at this point. (Although procedural dodges like the finding of laches by Pennsylvania’s Supreme Court to dismiss a challenge which it had previously ruled could not be brought until after an election where the plaintiff suffered harm is the sort of cheesy legal dodge which would be easy for the Supreme Court of the United States to overturn.) The key thing is that the litigation needs to be heard and decided on its merits.
The problem is that if the Democrats win – in the sense that the various certifications (often by ostensibly Republican state executives) are allowed to stand without further examination by the Republican/Trump/non-partisan parties, the claims of electoral fraud will not be extinguished. Conversely, if the Trump side wins the question of remedy is going to be huge. None of this is cut and dried and there is not a lot of precedent either way.
Worse, in many states, ballots which were subject to challenge have now been intermingled with perfectly legitimate ballots. Almost any order the Supreme Court might make would almost certainly remove at least some valid ballots as by catch. All of which the Supreme Court is aware of and will hear from the parties.
The worst possible outcome for our American friends would be for the Supreme Court to find significant fraud in several states but to decline to exclude ballots because it could not ascertain the fraudulent ones. At that point reasonable people could and would argue that the electoral system in the United States had become lawless. Simply a jungle in which who ever controlled the counting rooms would determine the outcome. (Some would argue that this has been the case in several American cities for decades.)
A better outcome would be for the Court to examine the individual claims of fraud, starting with the least controversial such as the dead and non-resident voting and working through a process to exclude illegal ballots based on no broad exclusions but rather a set of relatively straight forward cases. The court could do this in states which are very close and which would change the election outcome.
However, the Court could also come to the conclusion that, in aggregate the improprieties in a given state are so significant that the outcome in that state is a nullity. That the attempt to incrementally cure illegal ballots is impossible and that that state’s election for the Presidency is void. And then what?
One route would be to put the Presidential election into the House of Representatives where the vote would be by state delegation. However, that would have negative consequences for the many states whose elections were, if not perfect, not entirely crooked.
Another alternative, and one which I think would be seen as both legal and fair, would be to have a Court supervised “redo” election in the states where the evidence of fraud and impropriety was the strongest. One day, in person (with a very narrow absentee exception), ballots produced with only the two parties on them, ID required to get ballot and the purple ink to prevent double voting. Voting from 8-8, supervised hand count of the ballots which begins at 8:01 and continues until all the ballots have been counted. Assign a Justice to oversee each state in which there is a special election. Have US Marshals maintaining order and chain of custody at each polling place. If there are not enough Marshals then use other federal government resources.
The point of the exercise is for there to be full and fair elections in states where there is evidence of fraud and impropriety. Whether Trump or Biden wins is immaterial, the key thing is that the winner will be seen as fully legitimate.
I don’t think Trump is going anywhere soon. But, if the lawsuits fail and the great steal succeeds, the Donald could leave in a blaze of glory.
“More than half of the prison inmates in the United States are non-violent offenders. In 2006, for example, there were 1,331,100 people imprisoned, only 667,900 of those were convicted of violent crimes.” wisegeek 2013 (Yes, I am lazy…but you get the idea)
One of the few “plenary” powers of the President of the United States is pardons and commutations. There is literally nothing to stop Trump from pardoning or commuting the sentences of well over 600,000 currently incarcerated people. (And the US being the US, a majority of those would not be white.)
Michigan certified – in the face of rather strong evidence of miscounting and outright fraud – Joe Biden as the Presidential winner. This triggered a minor functionary, who had the pleasure of death threats, to release transition money to Biden. (Not yet President Elect Biden, if that happens it won’t happen until mid-December.)
One of my delightfully anti-Trump children texted, “Stick a fork in it”. Not yet. On the one hand I want to see what Rudy and the “official” Trump legal team will come up in Michigan, Nevada, Georgia and so on. On the other, I’d like to see what the unofficial Trump supporters, led by the estimable Sydney Powell come up with on the broader, and more criminal, question of coordinated electronic and paper tampering with the vote. Is there the hard evidence it would take to convince a court or is it all just smoke and hand waving?
Biden is doing just what I would expect a presumptive Presidential winner to do, naming his Cabinet and senior staff picks. Nothing wrong with that although the radical left of the Democratic Party are unlikely to be happy with the very Establishment picks so far. I suspect the Biden people will have cast the Biden Adminstration down to the Assistant Deputy Secretary level by the time the Trump litigation is decided.
Of course, the Democrats and more than a few Republicans of a RINO inclination, are suggesting that Trump concede. Michael Walsh makes a very strong case for why that should be the very last thing Trump does.
“Trump similarly grasps that to stand down now, even in the face of overwhelming opposition—some of it coming from within his own ranks—would spell an ignominious end to his presidency and demoralize his voting legions. To leave an open question of whether our porous and multifarious systems of voting are easily manipulated and therefore untrustworthy would be to do the nation a great disservice.
As we’ve seen throughout the past four years, appeasement doesn’t work. No matter what the duly elected president of the United States did, there was no satisfying the rabid left and its media lackeys, short of Trump’s expulsion from office, however effected.”
If there is proof of the widespread fraud which gave the election to Biden that needs to be exposed. The Courts may be reluctant to had the election to the victim of that fraud, but it is critical that such fraud as can be proven be addressed if only to shame its perpetrators into fixing a genuinely crappy electoral system. And, on the other hand, if Biden’s election was, more or less, clean, it is important that this finding be affirmed.
The Democrats spent four years denying the legitimacy of the Trump Presidency for no particularly good reason. The legitimacy of the Presidency of the winner of the 2020 Presidential election is going to be an open question until the very real legal questions surrounding the vote and the count are determined in Court.
If you read MSM, especially Canadian MSM, the US Presidential Election is over and Joe Biden will cruise to an easy victory in both the popular vote and in the swing states where US elections are decided. The polls say so. End of story.
It is trite to point out that the polls said the same thing about Hillary in 2016, yet here we are.
Elections are about a lot of things, policy, personality, demographics, ground game, likeability and so on. They serve as an outlet for the fears and frustrations of the electorate and an opportunity to express tribal loyalty. The 2020 US Presidential Election is really an up or down vote on Donald Trump.
In 2016 Trump short circuited the system by providing an alternative to a genuinely despised woman whose “turn” it was. If I had a vote, which I don’t because Canadian, I would not have voted for Trump, I would have voted against Hillary. I did not like Trump the man and was not at all excited at the prospect of “President Trump”.
This has changed a bit for 2020. He’s still an Orange Oaf but, in the face of multiple challenges, COVID 19 being only the most recent, he has managed to execute the office far better than I anticipated. No new wars, lots of new judges, de-regulation, tax cuts, a booming pre-COVID economy which led to very low unemployment generally and record lows for Blacks and Latinos. He has shown remarkable restraint in the face of the Antifa/BLM provocations and deference to the place of the States in the American Constitution on both COVID and the riots. For a rank amateur, often advised by people who did not share his agenda, Trump’s first term was a success.
Which is just one of the reasons I think he will be given a second term.
There are lots of others. Up until he beat COVID (we hope) in a weekend, Trump was running a real, old time, campaign. Flying into swing states and doing hanger rallies in places no Presidential candidate has been to in a century. Pulling 10,000 here, 20,000 there. And, of course, harvesting the data on all the people who wanted tickets.
The boat parades (apparently not organized by the campaign), truck parades and car parades, the spontaneous rally outside Walter Reed, even the Trump supporters greeting Biden when he occasionally campaigns, all indicate real enthusiasm for Trump. Biden’s campaign knows it can’t put on this sort of show so it is not even trying.
Trump is, first and foremost, a showman. He loves the crowds, the cheers, the signs. He has developed a rally “patter” with entertaining asides, imitations, jokes, insults all worked into the teleprompter material. His timing isn’t perfect but he never runs into “Please clap.” moments. Most of all, Trump always looks like he is having a ton of fun being with his people.
Now, if that was the whole of the Trump campaign it might very well beat the lame effort of the Dems and Joe Biden; but it is not:
“Although Stepien faces an unprecedented challenge — trailing in some national polls by double-digits with an unpopular incumbent in the midst of a pandemic — he has what Republicans believe is a crucial advantage over Democratic opponent Joe Biden: the Republican Party’s sophisticated, billion-dollar get-out-the vote operation.
Trump Victory, the joint operation between the RNC and the Trump campaign, has an army of 2,000 paid field staffers in 17 states and more than 2 million volunteers making phone calls and knocking on doors. The field operation claims to have made more than 90 million voter contacts in the cycle, including 12 million door knocks since they resumed the practice in June.
In just the last week, according to Trump Victory spokesman Rick Gorka, volunteers have knocked on more than 533,000 doors across the key states of North Carolina, Michigan, Wisconsin, Minnesota and Georgia.” cnn (September 10, 2020)
For years political consultants maintained that campaigns were won with advertising mainly on TV. Markets were saturated, consultants well paid – it was like selling soap. Now, fewer and fewer people are watching TV and if they are they have more than five channels to watch. National markets have collapsed, local markets are fighting for a share of fewer and fewer viewers. People get their news, their entertainment and their political views from the fragmented, siloed world of the internet. On the internet you can target very specifically, but you cannot really reach an undifferentiated mass audience.
Trump’s campaign figured that out in 2016 but it has had four years to figure out how to bypass both TV, mainstream media and the internet’s silos. A phone call is fine but the ultimate outreach to the undecided voter in key states is good, old fashioned, door knocking. It’s a big country, but in the states which matter, hundreds of thousands of direct contacts and a big data operation can make a huge difference.
Demographics matter too and here Trump has a huge advantage, he has nowhere to go but up with black Americans and Latinos. In 2016 Trump got 8% of black votes. According to exit polls in 2016 Trump got 29% of the Latino vote. For the past four years Trump has made a point of courting black and Latino voters. More importantly, in the pre-Covid economy employment rates for both groups hit historic highs. Will that translate to votes? I suspect it will, the question is how many. Much is made of the “shy” Trump vote. Realistically, you would have to be a very brave black person in a black community, to show any support for Trump. We’ll see how that goes but a tiny increase – and I mean 3% – in Trump voting in black and Latino demographics would have huge electoral consequences.
The final piece of the Trump victory is the gift of Joe Biden. No one hates Joe in the way people hated Hillary. He’s old, a bit dazed, corrupt, lousy at retail politics, bereft of policy and saddled with a VP candidate someone referred to as Hillary in blackface. But no one hates him. They just don’t like him very much. Even his supporters have bumper stickers saying “Settle for Biden”.
Incumbency is tough to defeat. People know who Donald Trump is. There are plenty of people who didn’t vote for Trump in 2016 and are looking forward to not voting for him in 2020. Just as there are lots who voted for Trump and will again. But no one is affirmatively voting for Joe Biden.
Which leads to the final reason why Trump will win. People who support Trump will all show up, most of the people who hate Trump will show up too, though likely not all – and there is no one who actually supports Joe Biden. Elections are decided by the people who actually vote. Trump’s job is to make sure every single one of his supporters and leaners (secret or otherwise) feels motivated enough to vote. And that is exactly what Trump and his organization are doing.
My eldest son and I have a lively online conversation which has gone on for years. We disagree about a lot but recently we have agreed that the stock market is heading towards a crash. Not an if, a when. Oddly, we both see the end of September as the likely date. Simon cites market history, I am inclined to go with people understanding “events” and responding to that understanding. Here are a few.
The American Election Whether you are a Trump fan or a Biden supporter does not matter because the Election itself is the market event. Markets could live with either a Trump or a Biden victory; what they cannot live with is the growing possibility that the Election will not be decided on Election Day. In critical states such as Wisconsin, Michigan and Pennsylvania, mail in ballots cannot begin to be counted until the polls are actually closed on Election Day. (You can get all the details in this excellent article, Why We Are Facing The Biggest Election Nightmare In Modern American History No Matter Who Ends Up Winning by Michael Snyder.)
Leaving aside the issues of fraud which arise with mail in ballots, the biggest problem is just how unlikely it is that we will know who has won the Presidency for days, perhaps weeks, after the polls have formally closed. The very definition of uncertainty.
Markets hate uncertainty and as the likelihood of a protracted vote count becomes more obvious the overall market is likely to become, in a word, skittish. Given that the general markets in the US, and to a degree in Canada, are already at all time highs, that will certainly tend towards defensive selling and profit taking. Which, in normal times, would actually be healthy. But these are not normal times.
COVID I think a plausible argument can be made that COVID, the disease, is abating. Case counts may pop here and there but that is almost always an artifact of more testing. Hospitalizations and death counts are low and going lower. The return to school will probably pop case counts in some places, but it is unlikely to have much impact on how many people get really, really sick. As one writer said about Sweden, “All the kindling is gone.” Which is pretty harsh but also, likely, accurate. COVID kills the elderly and the compromised; it is no fun for the rest of us but it is survivable.
However, the economic consequences of COVID, consequences which are entirely political rather than medical, are ripping through Western economies. Lockdowns, business closures, mandatory masking, broad layoffs, work from home, mortgage deferrals, evictions and eviction moratoriums are all in full swing. The idea of flattening the curve has given way to the goal of either avoiding or mitigating “the second wave”. The “vaccine” is variously “a month or two away”, “ready in 2021” or “very unlikely to be effective whenever it’s ready”.
Of course, the entire COVID “crisis” has become politicized with those on the left convinced that without masks and shutdowns we will all die, and those on the right certain that unless the economy restarts we’ll all die poor. Maskers see non-maskers as selfish, non-maskers see masks as a symbol of conformity. Democratic states wear their masks and their crashing economies as proud symbols of anti-Trump resistance. And so on.
From the market’s perspective the main effect of COVID is the creation of fear and uncertainty. While there are plenty of Robinhood traders happy to make good money day trading, there are also plenty of people eyeing the exits and wondering if “the top” has, in fact, arrived. The Robinhooders represent a tiny fraction of the very deep American stock market. If, as will almost certainly happen, they are hit with significant losses on their most recent FANG trades or if Tesla sinks like a stone, the overall markets won’t miss them. However, if the broader market becomes worried, the dash for the exits could be very ugly indeed. A so-called “second wave” of COVID, even if it is largely fictional could trigger a rush to cash out.
Antifa, BLM, protests, riots and arson In themselves, the various demonstrations and riots inspired by BLM and made nasty by Antifa, are largely irrelevant to all but a few hundred square blocks of a few American cities. (Yes, the craven pandering of big business and major league sports is obnoxious, but it is also very much a passing moment.) Applying a bit of crowd control and arresting leaders and organizers can, and has, shut the riots down where it has been allowed by politicians to happen. So far, BLM and Antifa have been denied the martyrs they need to grow.
In terms of economics, Antifa/BLM have caused several billion dollars worth of damage and made retailers more reluctant to locate in certain areas of certain American cities. However, America is a big place with a big economy, so the costs are relatively tiny. (Not so tiny for small businesses which have been torched.)
Psychologically and politically, the idea that there are nightly riots and that downtowns of relatively small cities like Kenosha could be razed is just one more shock to the system. The fact that police forces have been told to stand down in the face of the rioters and that state level prosecutors have declined to charge the rioters, erodes the faith people have in the overall system.
The fact that there are disturbances virtually every night drives home the message that there is no safety in the US. This is not actually true, the bulk of the United States will never see a BLM/Antifa protest much less riot; but that doesn’t actually matter. The riots and the seemingly impossible to appease demonstrators create a mood, a sense of unease.
Markets reflect the confidence of investors. Where that confidence is eroded the conditions are created for a crunch.
March and the Second Wave In late March we had what people called a mini-crash. The Dow, S&P 500, NASDAQ dropped hard as did the markets in other G-20 countries. At one point virtually every market in the world was off 25%. At the time commentators suggested this was a one time reaction to the economic effects of COVID.
The March crash very quickly reversed itself. The Fed turned on the money pipe and markets all over the world staged V shaped recoveries to the point where, last week the DOW, S&P 500 and NASDAQ were all at or near their all time highs.
But is it real? The March mini-crash suggested that the markets could be spooked easily. That they could recognize the immense economic implications of COVID. However, the speed of the recovery to new highs, suggests that the mini-crash did nothing to re-align the market’s value with the underlying realities of a collapsed GDP, very high unemployment and an accelerating “real” inflation rate.
Market crashes are sometimes triggered by a single event, the collapse of a bank, a commodity crash, or even a small war; but, more often, they happen when investors “lose confidence”. The end of the dot com bubble was not about the internet suddenly being useless, it was about millions of people saying, at more or less the same time, none of these dot com companies make any sense at these prices. It also happened when the overall economy was strong, American politics were in balance and there was no political pandemic battering the real economy.
The V shaped recovery from the March mini-crash suggests strongly that the real “correction” has not occurred yet. Remember, that in the dot com bubble and crash the NASDAQ went from a high of 4798 in March 2000 to a low of just of 1000 in two years.
I was delighted to see that BLM and Antifa have taken over a small area of Seattle declaring it “autonomous”, forbidding the police from entering and putting up perimeter fencing. I was even happier to note the emergence of a seriously alpha black guy named Raz as the self-appointed warlord of the Capitol Hill Autonomous Zone.
There are all sorts of hard heads, up to and including President Trump himself, who want this nonsense ended right now. “Send in the police, the National Guard, the 82 Airborne, Seal Team 6!” Crush the Antifa louts like the roaches they are.
Tactically and strategically sending in law enforcement, much less the military, would be a monumental error.
Antifa (and to a lesser degree, BLM) contains some very smart, very well read, people and those people have made it their business to look at asymmetrical warfare in detail. They are well aware that they cannot defend the CHAZ against even a token show of force on the part of the authorities. However, not for nothing is armed end of Antifa called the John Brown Gun Club.
John Brown was an abolitionist. He was convinced that slavery was against God and, very much in second place, against the principles up which the United States had been founded. He wanted to start a serious insurection and to that end, with a small force, attacked an arsenal at Harper’s Ferry Virginia in October 1859. He succeeded but word reached the Federal government and troops were sent to quell the insurrection. Under the direction of then Colonel Robert E. Lee, Brown was wounded and then captured. He was then tried for treason and hung. Just before his hanging on December 2, 1859, Brown uttered a prophetic forewarning of the coming Civil War: “I, John Brown, am now quite certain that the crimes of this guilty land will never be purged away but with blood.”
Brown was right and the Civil War began a bit later in 1861.
The strategists at Antifa will have also studied the various interations of the Irish Rebellion, the defeat of the British in India, the overthrow of apartheid in South Africa and the various actions of the Palestinians against the Israelis. Of course they have, in many ways it is impossible to study history or political science or “studies” without being exposed to these David and Goliath contests.
The brighter lights of Antifa will have understood the essential lesson of these struggles: you win by losing. Ideally in the bloodiest way possible.
Insurrectionists, at least the smart ones, know that they are not fighting the police or national guard or 82 Airborne with any hope of winning. Instead they are trying to lose to an enemy whose excesses will revolt the general run of the population.
Now, to beat an insurrection, you have to take away its oxygen and let it choke out on its own. For CHAZ the oxygen is attention. The romance of the barricades and audacity of insurrection attracts media attention which allows the Antifa people to seize the mic and make assorted demands. (Including, charmingly, a return of racial segregation.)
Any escalation on the part of the authorities will simply feed the flames. Sending in the riot police under a cloud of tear gas and a hail of rubber bullets (cliches but that’s how this stuff is written) is ideal fuel for the Antifa fire. All the better if a big, strong, articulate black man like Raz is gunned down.
At this moment the very best thing the authorities can do is a very vigorous “nothing”. No response whatsoever. Ignore the demands, ignore the spray paint, ignore the barricades and the stolen fences.
Let Antifa and BLM dig themselves in good and deep. Let the inherent tension between Brother Raz and his people and the revolutionary intellectuals of Antifa have a chance to work their magic. Let the logistical nightmare of 500 extra people in a small neighbourhood work itself out. Keep the water and power on. Perhaps jam cell and wifi signals. Surveil the Hell out of the place and don’t be shy. Keep a large and obvious drone presence so that the insurrectionists know they are being watched.
The ignominious collapse of the CHAZ is only a matter of time and patience. It might take a week, it might take a month, but without martyrs to sustain it, CHAZ will join Occupy in the scrapheap of history.
Very smart investment gurus tend to agree: you cannot time the markets. That is, you almost never know where the top of a market is and it is nigh on impossible to pick a bottom.
Some go further and pronounce that picking individual stock or commodity is a fool’s errant and that simply “buying the index” is about the best you can do.
I tend to agree with this view except in the most extreme circumstances and then in only a few of those circumstances. For example, I don’t think the crash of 2008/2009 could have been predicted by any one who was not intimately familiar with the shitshow that was securitized mortgage lending and its implications for over leveraged banks. And, even per “The Big Short”, had you known all of that, the consequences for the overall market of what was essentially a banking crisis were far from predictable.
On the other hand, the bursting of the dot com bubble in March of 2000 was a matter of when not if and it was pretty obvious for at least a year before it finally burst. For a real bubble to form you need novice investors putting value on companies which have no earnings and you need people trading shares for the sake of trading. In the run up to the 2000 crash “day traders” were the new financial heros and people were raising a billion dollars to sell reams of copy paper or fifty pound bags of dog food online.
In the winter of 1928 Joe Kennedy, father of JFK and major stock market player, stopped to get his shoes shined. The shoeshine boy leaned in and said, “Buy Hindenburg”. Kennedy began unwinding his positions saying, “You know it’s time to sell when shoeshine boys give you stock tips. This bull market is over.”
I had a similar experience in late 1999 when a friend took out a mortgage on her condo to buy shares in the billion dollar online copy paper empire. She had a perfectly good job in retail garden supplies. Remembering Kennedy, I advised another friend that her Nortel was looking a bit overbought. As it happened she sold quite near the peak.
The 2020 equivalent of the shoeshine boy is the perfect storm is the free trading platform, robinhood.com. This is a nicely designed site where you can trade shares on your computer or phone. It has become very, very popular with younger, new investors. My late 1990’s day trading pals would have killed for this sort of interface and no brokers fees. It has spawned a whole host of reddit chats, twitter streams and countless YouTube videos on the excitement of swing trading. (One fun spot to watch Robinhood is the https://robintrack.net/leaderboard which shows which stocks the people on Robinhood are buying. It is a bit slow and buggy but a great front row seat.)
What is striking about the robinhood.com world is that it revolves around trading rather than any sort of “investing”. You hop into APPL in the morning, see if you can make a couple of bucks by noon and move onto the next thing. And Apple is a real, solvent, company.
Robinhood has been in the news recently because the herd has charged into the shares of a number of companies which are either in or near bankruptcy. Hertz Rent-a-Car dropped from $20 to $0.50 in three months as the market realized that with no travelers there would be no car rentals. Interestingly, we learn from robintrack.net that at $20 there were a little over 1000 users holding, as Hertz crashed the Robinhood users piled in, at $0.55 there were 44,000 and there are now 158,000. And many will have made money, lots of money, trading the gyrating price from $0.50 to back up to $5.00.
In the run up to the crash of October 1929, long after Joe Kennedy had pulled his money from the market, retail traders were coining it trading the “swings” on margin accounts. It didn’t matter what the company actually did, it was going up. The same “irrational exuberance” was a big feature in the dot com bubble.
Justifying the current trading frenzy are all sorts of snappy phrases, “You can’t fight the Fed” is a favourite. “V” shaped recovery is another. There is a sense that age of the dinosaurs, the Warren Buffets and the Carl Ichans is over, that fresh, app driven approaches to investing, and more importantly, trading have been unleashed.
The election and Presidency of Donald Trump created a sense that we had all stepped into an unanticipated world. At the best of times, Trump is unpredictable and the reactions to Trump are off the scale of normal political response. Then COVID and the huge economic uncertainty it has unleashed came crashing onto the stage. Then the George Floyd convulsion layered on another coat of unreality. In fact, surreality.
The thing about surrealism is that it depends on reality remaining fixed for its often intoxicating effects. Dali’s melting clocks are striking because they do not conform to how we know real clocks look and behave. Stepping away from a surrealist experience there is a snap back to reality. Sometimes you see that reality differently, but it is there nonetheless.
The Robinhood day trading, options fueled, herd investing suggests very strongly that a harsh, perhaps very harsh, snap back is pending. What triggers that snap back is unknown (and therefore impossible to time). It could be as simple a the closure of a bankrupt commercial mortgage fund or the end of banks mortgage deferrals. Whatever it is will be enough for retail investors to start liquidating their positions.
The lessons of the 1929 crash and the 2000 dot com bust were simple – get out early and be in no hurry to get back in. Right now the dinosaurs like Buffet and Ichan are sitting on stacks of cash. Just like Joe Kennedy was when Wall Street swan dived in October 1929. They got that cash by selling their shares to shoeshine boys and the bright lights at Robinhood.
I have been paying a bit of attention to the impeachment hearings conducted by the Intelligence Committee of the US House of Representatives. I was politically aware when the Nixon hearings occurred and followed the Clinton impeachment. In both cases the public was engaged and, while there were obviously partisan considerations, the elected officials seemed to take their responsibilities seriously.
Taking responsibilities seriously means a number of things: first and foremost, due process and a respect for evidence. Second, being clear about what is being alleged. Third, looking for a measure of bi-partisan support for the process. Fourth, a sense of fairness.
There is no legal requirement for any of these things. After all, impeachment we are endlessly told, is a political not a legal process. However, because the process is so deeply political it is unlikely to succeed without a political consensus supporting it. At the moment it looks very much as if the parade of witnesses in front of the Schiff committee have failed to create a strong, or even partial consensus in favour of impeachment.
Polling on fairly complicated questions is equivocal but it can give a sense of where the country is comfortable. For there to be any chance that sufficient Republicans in the Senate will vote for impeachment, the polls would have had to turn in favour of impeachment. Probably by a large margin. This has not happened and the fantastically one sided hearings under Chairman Schiff have not helped.
Which raises a huge problem for the Democrat party. To dyed in the wool Democrats the fact Trump is in office at all is an abuse of that office and impeachment on any grounds whatsoever makes total sense. They cannot imagine how this could be anything but self-evident. Which has meant that they were deeply careless in constructing their impeachment case. They paid no attention to what actually was the “impeachable offence” they were going after. They rigged the rules so that only their witnesses were heard and rigged them even further by creating a procedure designed to put the minority at a significant disadvantage cross examining those witnesses. They were blatant about this rigging.
The perception of unfairness, once established, is difficult to deal with but this was not the worst error the Democrats made. The worst error was believing that a startlingly insignificant bit of Presidential action (or inaction) the proof of which was ambiguous at best would galvanize the American People to demand Trump’s removal. There is no coming back from this misjudgment. All the more so because the action was so boring.
No one outside bureaucratic circles in Washington is the least bit interested in what Trump may have said or implied to some guy with an unpronounceable name who is the President of Ukraine which most Americans could not find on a map. There is no “blue dress”, no “18 minute gap” – there are just assorted, rather self-important, bureaucrats who overheard or heard from a colleague that the American President behaved inappropriately.
Of course, the President in question, has a talent for cutting to the chase and when he released the transcript of his call with the President of Ukraine, the air went out of the Democrats’ impeachment balloon.
The House of Representatives is on its Thanksgiving recess which means that the Representatives will be back in their districts. The media frenzy will die down and Congressmen and women are going to be talking to their constituents. If the impeachment hearings had been successful they would be hearing support for a vote on articles of impeachment. However, given the shambles of Schiff’s show, the best the Democrats can hope for is indifference, the worst will be independents telling them to forget impeachment and to get on with the business of the nation.
At a guess, following Thanksgiving, Nancy Pelosi will be looking for a way to end the whole impeachment show. She has very few good alternatives. She might well lose a vote on articles of impeachment. She could likely win a censure motion but that will not satisfy the rabid base. Perhaps her best bet would be to allow a low key report from the Intelligence committee to go to the Judiciary committee and then sit on it for a couple of months before announcing that it was up to the American people to throw Trump out in the next election.
No matter which way Pelosi jumps, losing touch with the American people on the question of impeachment is going to hurt the Democrats politically. It has solidified Trump’s base, annoyed independents and called into question the Democrats’ judgement which could cost them seats in Congress and the Senate. Plus, though this will only become clear in the next few weeks, it has fatally compromised Democratic front runner Joe Bidden.
Asking a foreign leader for assistance in an ongoing investigation is neither a high crime nor a misdemeanour. Releasing the transcript of that conversation and the so-called “whistle blower’s” complaint about that conversation is not a cover-up.
President Trump is an exceptionally lucky man. A less lucky man would be facing an intelligent opposition led by people of integrity who had at least some clue as to the workings of the American Constitution. Instead, he faces a group of idiots convinced that the impeachment provisions of the Constitution are there so the House of Representatives can kick a President out of office for pretty much any reason at all.
The spectacle of the Democratic Party “impeaching the “motherf*cker” out of pique will, I suspect, pretty much ensure Trump’s re-election. All of the potential Democratic nominees will have to at least pretend to support the bogus effort. Which will leave them trying to pretend that somewhere at the bottom of the pile of horseshit there really is a pony.
The by-catch on this lame effort is Joe Biden. Corrupt or not, Biden is going to have to explain how, somehow, his son secured a Ukrainian sinecure for which he was entirely unqualified. Bluster will not do it as he’ll have the other Democratic candidates gunning for him. I am not sorry to see Biden sink but, realistically, he was the Democrat with the best chance of beating Trump.
When the Republicans impeached but did not convict Bill Clinton it was a hugely partisan affair. However, the actual articles of impeachment – lying under oath and obstruction of justice – had been thoroughly investigated and there was little doubt that Clinton had actually done the deeds. A Democratic minority in the Senate, along with several Republicans, found Clinton not guilty. It was a partisan impeachment and a partisan acquittal.
Which the Trump impeachment most certainly is in the House of Representatives. However, the huge difference is that, unlike Clinton, Trump has not actually done anything wrong. He has not lied, he has not covered up. Which will make the baying of the House Democrats sound all the more partisan. Clinton spent a lot of political capital defending himself, Trump will likely accrue political capital simply by pointing out the worthlessness of the charges against him and the nastiness of his accusers.
There is every chance that, as the hollowness of the accusations becomes apparent, Democratic members of the House in close races will actually be harmed by the sheer partisanship of the attacks on the Presidency. Flipping the House and retaining the Senate are now well within Trump’s reach.
Of course, Trump now has the opportunity to let justice takes its course with the various FBI, DOJ and IC people who were involved in the Russia fraud and, with them, the nasty pieces of work who abused their positions to exonerate Hillary on her emails and misused the spying capacity of the United States to surveil Trump and his campaign.
Jay Currie 