Nov. 03, 2020 – 19:45 – Talk radio host Rush Limbaugh provides insight into Election Day 2020 and argues President Trump has ‘worked tirelessly for the American people.’
The benchmark S&P 500, which has predicted the winner of 87% of all presidential elections and every one since 1984, added 1.2% from July 31 through Monday.
Typically, a gain in the three months leading up to the election has signaled a victory for the incumbent party while a loss signaled a transfer of power.
Ticker Security Last Change Change % SP500 S&P 500 3371.5 +61.26 +1.85%
“With the market staying up here and rallying, it’s telling me that [Trump] is going to occupy 1600 again for another four years,” said Anthony Saliba, CEO of the Chicago-based Matrix Execution Group, an executing broker-dealer that specializes in options and equities. The White House’s address is 1600 Pennsylvania Avenue.
While the S&P 500 is pointing to a Trump win, other indicators based on markets and the economy suggest former Vice President Joe Biden will be the candidate who takes the oath of office on Inauguration Day.
The U.S. dollar, which has correctly picked seven of the last eight election winners and every one since 2000, gained 0.6% in the three months through Monday. On Election Day, the index was trading as little as 2 cents above its July 31 close.
Also playing in Biden’s favor is the fact that earlier this year, the coronavirus plunged the U.S. economy into its deepest recession of the post-World War II era. Presidents who have overseen a recession in the two years ahead of an election have lost five of seven campaigns, including the most recent case – former President Bill Clinton’s victory over George H.W. Bush.
But even with the coronavirus-induced plunge, 56% of Americans say they are better off now than they were four years ago, according to a Gallup poll released earlier this month.
The reading topped those of former Presidents Barack Obama (45%), George W. Bush (47%), George H.W. Bush (38%) and Ronald Reagan (44%). Of that group, only George H.W. Bush did not win reelection.
Former personal attorney to President Trump Michael Cohen and CNN’s Don Lemon discuss President Trump’s unwillingness to say he would accept the election results and the peaceful transfer of power should Joe Biden win the presidency in November.
Here are two conditions the Democrat should set.
I worry about Joe Biden debating Donald Trump. He should do it only under two conditions. Otherwise, he’s giving Trump unfair advantages.
First, Biden should declare that he will take part in a debate only if Trump releases his tax returns for 2016 through 2018. Biden has already done so, and they are on his website. Trump must, too. No more gifting Trump something he can attack while hiding his own questionable finances.
And second, Biden should insist that a real-time fact-checking team approved by both candidates be hired by the nonpartisan Commission on Presidential Debates — and that 10 minutes before the scheduled conclusion of the debate this team report on any misleading statements, phony numbers or outright lies either candidate had uttered. That way no one in that massive television audience can go away easily misled.
Debates always have ground rules. Why can’t telling the truth and equal transparency on taxes be conditions for this one?
Yes, the fact that we have to make truth-telling an explicit condition is an incredibly sad statement about our time; normally such things are unspoken and understood. But if the past teaches us anything, Trump might very well lie and mislead for the entire debate, forcing Biden to have to spend a majority of his time correcting Trump before making his own points.
That is not a good way for Biden to reintroduce himself to the American people. And, let’s not kid ourselves, these debates will be his reintroduction to most Americans, who have neither seen nor heard from him for months if not years.
Because of Covid-19, Biden has been sticking close to home, wearing a mask and social distancing. And with the coronavirus now spreading further, and Biden being a responsible individual and role model, it’s likely that he won’t be able to engage with any large groups of voters before Election Day. Therefore, the three scheduled televised debates, which will garner huge audiences, will carry more weight for him than ever.
He should not go into such a high-stakes moment ceding any advantages to Trump. Trump is badly trailing in the polls, and he needs these debates much more than Biden does to win over undecided voters. So Biden needs to make Trump pay for them in the currency of transparency and fact-checking — universal principles that will level the playing field for him and illuminate and enrich the debates for all citizens.
Of course, Trump will stomp and protest and say, “No way.” Fine. Let Trump cancel. Let Trump look American voters in the eye and say: “There will be no debate, because I should be able to continue hiding my tax returns from you all, even though I promised that I wouldn’t and even though Biden has shown you his. And there will be no debate, because I should be able to make any statement I want without any independent fact-checking.”
If Trump says that, Biden can retort: “Well, that’s not a debate then, that’s a circus. If that’s what you want, why don’t we just arm wrestle or flip a coin to see who wins?”
I get why Republican senators and Fox News don’t press Trump on his taxes or call out his lies. They’re afraid of him and his base and unconcerned about the truth. But why should Biden, or the rest of us, play along?
After all, these issues around taxes and truth are more vital than ever for voters to make an informed choice.
Trump, you will recall, never sold his Trump Organization holdings or put them into a blind trust — as past presidents did with their investments — to avoid any conflicts of interest. Rather, his assets are in a revocable trust, whose trustees are his eldest son, Donald Jr., and Allen Weisselberg, the Trump Organization’s chief financial officer. Which is a joke.
Trump promised during the last campaign to release his tax returns after an I.R.S. “audit” was finished. Which turned out to have been another joke.
Once elected, Trump claimed that the American people were not interested in seeing his tax returns. Actually, we are now more interested than ever — and not just because it’s utterly unfair that Biden go into the debate with all his income exposed (he and his wife, Jill, earned more than $15 million in the two years after they left the Obama administration, largely from speaking engagements and books) while Trump doesn’t have to do the same.
There must be something in those tax returns that Trump really does not want the American public to see. It may be just silly — that he’s actually not all that rich. It may have to do with the fact that foreign delegations and domestic lobbyists, who want to curry favor with him, stay in his hotel in Washington or use it for corporate entertaining.
Or, more ominously, it may be related to Trump’s incomprehensible willingness to give Russian President Vladimir Putin the benefit of every doubt for the last three-plus years. Virtually every time there has been a major public dispute between Putin and U.S. intelligence agencies alleging Russian misdeeds — including, of late, that the Kremlin offered bounties for the killing of U.S. soldiers in Afghanistan — Trump has sided with Putin.
The notion that Putin may have leverage over him is not crazy, given little previous hints by his sons.
As Michael Hirsh recalled in a 2018 article in Foreign Policy about how Russian money helped to save the Trump empire from bankruptcy: “In September 2008, at the ‘Bridging U.S. and Emerging Markets Real Estate’ conference in New York, the president’s eldest son, Donald Jr., said:
‘In terms of high-end product influx into the United States, Russians make up a pretty disproportionate cross-section of a lot of our assets. Say, in Dubai, and certainly with our project in SoHo, and anywhere in New York. We see a lot of money pouring in from Russia.’”
The American people need to know if Trump is in debt in any way to Russian banks and financiers who might be close to Putin. Because if Trump is re-elected, and unconstrained from needing to run again, he will most likely act even more slavishly toward Putin, and that is a national security threat.
At the same time, debating Trump is unlike debating any other human being. Trump literally lies as he breathes, and because he has absolutely no shame, there are no guardrails. According to the Fact Checker team at The Washington Post, between Trump’s inauguration on Jan. 20, 2017, and May 29, 2020, he made 19,127 false or misleading claims.
Biden has been dogged by bone-headed issues of plagiarism in his career, but nothing compared to Trump’s daily fire hose of dishonesty, which has no rival in U.S. presidential history. That’s why it’s so important to insist that the nonpartisan Commission on Presidential Debates hire independent fact-checkers who, after the two candidates give their closing arguments — but before the debate goes off the air — would present a rundown of any statements that were false or only partly true.
Only if leading into the debate, American voters have a clear picture of Trump’s tax returns alongside Biden’s, and only if, coming out of the debate, they have a clear picture of who was telling the truth and who was not, will they be able to make a fair judgment between the two candidates.
That kind of debate and only that kind of debate would be worthy of voters’ consideration and Biden’s participation.
Otherwise, Joe, stay in your basement.
“We are about to see the best economic data we’ve seen in the history of this country,” says a top former economic adviser to Obama.
In early April, Jason Furman, a top economist in the Obama administration and now a professor at Harvard, was speaking via Zoom to a large bipartisan group of top officials from both parties. The economy had just been shut down, unemployment was spiking and some policymakers were predicting an era worse than the Great Depression. The economic carnage seemed likely to doom President Donald Trump’s chances at reelection.
Furman, tapped to give the opening presentation, looked into his screen of poorly lit boxes of frightened wonks and made a startling claim.
“We are about to see the best economic data we’ve seen in the history of this country,” he said.
The former Cabinet secretaries and Federal Reserve chairs in the Zoom boxes were confused, though some of the Republicans may have been newly relieved and some of the Democrats suddenly concerned.
“Everyone looked puzzled and thought I had misspoken,” Furman said in an interview. Instead of forecasting a prolonged Depression-level economic catastrophe, Furman laid out a detailed case for why the months preceding the November election could offer Trump the chance to brag — truthfully — about the most explosive monthly employment numbers and gross domestic product growth ever.
Since the Zoom call, Furman has been making the same case to anyone who will listen, especially the close-knit network of Democratic wonks who have traversed the Clinton and Obama administrations together, including top members of the Biden campaign.
Furman’s counterintuitive pitch has caused some Democrats, especially Obama alumni, around Washington to panic. “This is my big worry,” said a former Obama White House official who is still close to the former president. Asked about the level of concern among top party officials, he said, “It’s high — high, high, high, high.”
And top policy officials on the Biden campaign are preparing for a fall economic debate that might look very different than the one predicted at the start of the pandemic in March. “They are very much aware of this,” said an informal adviser.
Furman’s case begins with the premise that the 2020 pandemic-triggered economic collapse is categorically different than the Great Depression or the Great Recession, which both had slow, grinding recoveries.
Instead, he believes, the way to think about the current economic drop-off, at least in the first two phases, is more like what happens to a thriving economy during and after a natural disaster: a quick and steep decline in economic activity followed by a quick and steep rebound.
The Covid-19 recession started with a sudden shuttering of many businesses, a nationwide decline in consumption and massive increase in unemployment. But starting around April 15, when economic reopening started to spread but the overall numbers still looked grim, Furman noticed some data that pointed to the kind of recovery that economists often see after a hurricane or industrywide catastrophe like the Gulf of Mexico oil spill.
Consumption and hiring started to tick up “in gross terms, not in net terms,” Furman said, describing the phenomenon as a “partial rebound.” The bounce back “can be very very fast, because people go back to their original job, they get called back from furlough, you put the lights back on in your business. Given how many people were furloughed and how many businesses were closed you can get a big jump out of that. It will look like a V.”
Furman’s argument is not that different from the one made by White House economic advisers and Trump, who have predicted an explosive third quarter, and senior adviser Jared Kushner, who said in late April that “the hope is that by July the country’s really rocking again.” White House officials were thrilled to hear that some of their views have been endorsed by prominent Democrats.
“I totally agree,” Larry Kudlow, head of the White House National Economic Council, replied in a text message when asked about Furman’s analysis. “Q3 may be the single best GDP quarter since regular data. 2nd half super big growth, transitioning to 4% or more in 2021.” He called Furman, whom he said he knows well, “usually a straight shooter. Hats off to him.”
“I have been saying that on TV as well,” said Kevin Hassett, a top Trump economic adviser, who pointed to a Congressional Budget Office analysis predicting a 21.5 percent annualized growth rate in the third quarter. “If CBO is correct we will see the strongest quarter in history after the weakest in Q2.”
Peter Navarro, a Trump trade and manufacturing adviser who’s a Harvard-educated economist, called the high unemployment America is currently facing “manufactured unemployment, which is to say that Americans are out of work not because of any underlying economic weaknesses but to save American lives. It is this observation that gives us the best chance and hope for a relatively rapid recovery as the economy reopens.”
(Asked about his new fans in the White House, Furman responded, “They get the rebound part, but they don’t get the partial part.”)
A rebound won’t mean that Trump has solved many underlying problems. Since the crisis started, many employers have gone bankrupt. Others have used the pandemic to downsize. Consumption and travel will likely remain lower. Millions of people in industries like hospitality and tourism will need to find new jobs in new industries.
The scenario would be a major long-term problem for any president. But before that reality sets in, Trump could be poised to benefit from the dramatic numbers produced during the partial rebound phase that is likely to coincide with the four months before November.
That realization has many Democrats spooked.
“In absolute terms, the economy will look historically terrible come November,” said Kenneth Baer, a Democratic strategist who worked in a senior role at the Office of Management and Budget under Obama. “But relative to the depths of April, it will be on an upswing — 12 percent unemployment, for example, is better than 20, but historically terrible. On Election Day, we Democrats need voters to ask themselves, ‘Are you better off than you were four years ago?’ Republicans need voters to ask themselves, ‘Are you better off than you were four months ago?’”
One progressive Democratic operative pointed out that recent polling, taken during the nadir of the crisis, shows Joe Biden is struggling to best Trump on who is more trusted to handle the economy. “Trump beats Biden on the economy even right now!” he said. “This is going to be extremely difficult no matter what. It’s existential that we figure it out. In any of these economic scenarios Democrats are going to have to win the argument that our public health and economy are much worse off because of Donald Trump’s failure of leadership.”
The former Obama White House official said, “Even today when we are at over 20 million unemployed Trump gets high marks on the economy, so I can’t imagine what it looks like when things go in the other direction. I don’t think this is a challenge for the Biden campaign. This is the challenge for the Biden campaign. If they can’t figure this out they should all just go home.”
The Biden campaign seems to recognize the challenge. “The way that Biden talks about the economy is not just tied to the Covid crisis, it’s also about the things that Donald Trump has done to undermine working people since the day he took office,” said Kate Bedingfield, Biden’s deputy campaign manager. “But secondly, it’s also highly likely that under any economic circumstances in the fall, Trump is likely going to be the first modern president to preside over net job loss.”
Between now and Election Day, there will be five monthly jobs reports, which are released on the first Friday of every month. The June report, covering May, is likely to show another increase in unemployment. But after that, Furman predicts, if reopening continues apace, the next four reports could be blockbusters. “You could easily have 1 to 2 million jobs created a month in those four reports before November,” he said.
He added, “And then toward the end of October, we will get GDP growth for the third quarter, at an annualized rate, and it could be double-digit positive economic growth. So these will be the best jobs and growth numbers ever.
Furman noted that there is one major obvious caveat: “If there’s a second wave of the virus and a really serious set of lockdowns, I wouldn’t expect to see this. But I think the most likely case is the one I just laid out.”
When Obama ran for reelection in 2012, during the recovery from the Great Recession, he was able to point out that the unemployment rate was dropping about 1 point every year. But in a V-shaped recovery it would be much faster. “The Trump argument will be he’s producing the fastest job growth and fastest economic growth in history. If he has any ability to do nuance he would say, ‘We are not there yet, reelect me to finish the job,’” Furman said. “The Biden argument will be the unemployment rate is still 12 percent and even with those millions of jobs we are still down 15 million jobs and the only way for this to be fixed is new economic policies.”
Austan Goolsbee, a predecessor to Furman as chairman of the Council of Economic Advisers in the Obama White House, said the recovery would be more like a reverse check mark, rather than a V, and that Biden and Democrats would need to point out that the explosive numbers predicted for the late summer and fall will not erase all of the damage.
“I view it as Trump left the door open and five rats came into the kitchen and you’re going to brag, ‘Look I got two of the rats out?’” Goolsbee said. “There’s a high risk you look completely out of touch if you still have double-digit unemployment rates.”
Sen. Chris Coons (D-Del.), who is close to Biden, said he’s been studying numerous economic forecasts and isn’t convinced a V-shaped rebound is certain. “It seems pretty unlikely to me that we’re going to have a really robust recovery in the next few months,” he said. “Of course, we all hope there will be. Frankly, no matter what the recovery looks like, I expect President Trump to either take credit for things he had nothing to do with or to avoid blame for things he helped cause.”
Furman is an economist, but he had some strategic advice for the Biden campaign. “Don’t make predictions that could be falsified. There are enough terrible things to say you don’t need to make exaggerated predictions,” he said. “The argument that we are in another Great Depression will look like it was overstated. Trump can say, ‘Two million deaths didn’t happen, Great Depression didn’t happen, we are making a lot of progress.’”
Real Vision CEO, Raoul Pal, examines via Skype the recent turmoil with an international cadre of outspoken experts: monetary economist George Selgin, George Goncalves of The Bond Strategist, Scott Skyrm, executive vice president at Curvature Securities, and Dr. Z. Barton Wang of Barton Research. Join Raoul on this voyage of discovery as he discusses repo and more with some of the sharpest minds in finance. Filmed on January 31, 2020, in Grand Cayman.
< 8 min: I tend to agree with the Fed that the current repo operation is not QE, but that having a standing repo facility handles high demand (like at the end of the month)
There are multiple factors that combine to increase liquidity demand.
12 min: The balance sheet is never going to go down.
13:30 min: The Fed and Treasury don’t appear to be talking. One theory is that Mnuchin is trying to force the Fed’s hand
17:26 If we have a recession, we will see genuine QE that no one can deny.
I worry that they will resort to QE even if there isn’t a recession.
- corridor vs floor system
~19:30 There is a lot of leverage that keeps asset prices high and liquidity is necessary to support this.
I’ll all for the Fed providing liquidity, but there should be a penalty rate
20:10: I agree that QE will happen and it will arrive quickly.
The next QE will be done in such a technical way as to “bore” the public.
33 min: The Equity Markets believe they are doing a version of QE.
(QE) is like a calibration thing.
They are going to have to steepen the curve.
44 min: Most of the Hedge Funds that want cash want it first thing in the morning, but other players come in later (New York time)
48 min: Is excess leverage behind this?
55:50: So what you’re saying is that they can’t run such a large deficit. In a recession they could run a larger deficit.
1hr 01 min: To me, it smacks of leverage (from hedge funds)
1 hr 04 min: Why is the (Fed) balance sheet affecting equities?
According to Basel 3, Banks need assets at the Fed to participate in Repo market
- A lot of banks weren’t able to participate in the repo market,
- This affected the hedge fund’s ability to use leverage from borrowed repo money
- The repo market is the liquidity factor for leverage
- Higher repo interests spikes (2% -> 10%) caused the hedge funds to liquidate their positions
- The equity rallies are a direct consequence of the Fed Repo Liquidity
- Hedge funds are using the liquidity
The Fed is now going to be permanently involved. They messed up and now are going to oversupply, which they don’t view as a big problem.
1 hr 10 min: Treasury Securary Mnuch announced ..
They have tons of ammo to dump money into the economy right before the election.
Bond yields are collapsing.
If the US Dollar Collapses, European and Japanese will not be able to play in Equities so much and Equities could fall.
- Euro Dollar funding depends on Basel 3 regulations
1 hr 14 min: A steeper yield curve helps foreign buyers of Treasuries
- This means that they will likely have to cut rates (given corona virus and deficits)
- They will probably be forced to cut rates soon.
Bonds give better signals about the economic cycle than Stocks.
1 hr 18 min: It all depends on Treasuries (for equity) they have so much cash they can flood the market with $40 billion any time they want. Their action is the biggest contributor to volatility.
Is Mnuchin essentially using this as an economic weapon in his ability to micromanage the economy? (before the election)
I don’t know but he has a lot of ammo. It looks suspicious. We should ask him in his press conferences.
If he decides he wants to put money in his checking, there’s nothing the Fed can do about it without blowing up the markets.
This is unprecedented except during the financial crisis.
Treasure has become the marginal provider of liquidly and that who we should watch.
The Treasury General Account is the “nuclear weapon”.
There is a potential dollar collapse in the future. Markets can’t get enough dollars.
Maziar Minovi, CEO of Eurasia Group, joins Real Vision to discuss the biggest geopolitical threats to global stability that he sees on the horizon. He analyzes the ongoing decoupling of the US-China trade relationship and argues that the severing of technological protocols could inflict the most lasting damage. Minovi explains why he believes the rising cynicism of the American voter to be the greatest risk to global stability. Filmed on January 22, 2020, in New York.