The probability of a successful Trump challenge to the count is very low

Outlook:

We get the monthly jobs report today, forecast at a gain of 530,000 in Oct (WSJ), less than 661,000 in September, itself lower than 1.5 million in August. Now there's a flattening curve. Note that Canada also reports employment today, likely another flattening.

The Fed had nothing new to say yesterday, although the WSJ tries to make hay out of straw with the idea that "The Federal Reserve Doesn't Have to Just Wait on Washington--As the outlook for fiscal stimulus remains unclear, the Fed has options of its own." Golly, let's read that article. But there's nothing there. "One step it might take, Evercore ISI strategists point out, would be to make a commitment to keep buying bonds until certain criteria are met, as it has with its near-zero rate policy. It might also change the composition of its purchases to target longer-duration securities, putting further downward pressure on long-term interest rates." Bah. The story does point out that Senate leader McConnell has agreed to a second stimulus this year but with no dollar price-tag attached, it's without meaning. The Fed has big worries about the recovery sliding into nothing and the unrecoverable damages from bankruptcies and foreclosures, but offers nothing new—until after the election.

About the election: as of 7:30 am Friday morning New York time, it seems almost certain Biden will win. We should know by the end of the day. Then it's all over except the shouting—Trump's shouting. The probability of a successful Trump challenge to the count is very low. He won't go quietly and it could be weeks before we get a final decision—Pennsylvania declares officially on Dec 1, for example—but the majority will accept the outcome. We feel the Trump challenge in the courts will fail for two reasons: it's baseless (meaning without evidence), and the judicial system is very leery of getting involved.

One giant fly in the ointment is whether the incoming Biden administration goes after the Postal Service for screwing with ballots. This is Job One in the long list of things a new government needs to do to fill loopholes nobody ever imagined would need filling because norms and customs were keeping presidents from doing sleazy and unethical stuff.

This good news is mitigated by the unhappy fact that the Senate most likely remains in Republican hands. As McConnell has said repeatedly, his goal in life is to prevent Obama and now Biden from getting anything they propose. This is deeply dollar-negative because gridlocked government offsets any favorable economic developments we do get and keeps the Fed on the dovish side for longer.

There's nothing in today's conditions that points to a dollar reversal to the upside, assuming profit-taking is postponed to next week.

Politics: Several readers picked out the last paragraph yesterday to say thanks. That's the one that says we can't blame Trump but rather ourselves for giving him so many votes in this election after we knew his true colors. We diminish ourselves. Or, as Pogo put it, "We have seen the enemy and he is us."

To be fair, some Republicans are party-loyal and hold their nose to include Trump because they have powerful convictions about abortion, gun control, smaller government with fewer government regs, deficit control, and other defensible positions. The first problem is that the Republican priority list doesn't contain civil rights at all. Another problem is that the true believers so often have their facts wrong. For example, the very first executive order Trump issued allowed certified mentally ill people to buy guns. Is that not a bridge too far? Those against government regulation (and certainly many regs are unbearably stupid) would scream bloody murder if it were their backyard being polluted by industrial waste or they got diseases from food no longer under the watchful eye of the Food and Drug Administration, corrupt though it has been shown to be in more than one instance.

Dems, and the vast majority of foreigners who are paying attention, judging from the foreign press, see Trump as so abominable, repulsive, incompetent, and dangerous that voters should have gone for country over party. What foreigners do not grasp about the US is that we committed a reprehensible crime against humanity and have never come to terms with it. After stealing a continent from the Indians (sorry, Native Americans), we had slavery for 244 years, from the first slave ship in 1619 to the Emancipation Proclamation in 1863 and 18th Amendment in 1865. Most other countries that consider themselves civilized and/or Christian outlawed slavery long before the US (Spain, which started the slave trade, in 1811 and the UK in 1833).

The important point is that we have never comes to terms with it. Trump's position is that we don't need to come to terms with it. The slaves got free, let them sink or swim. Anything Trump ever said about black people was derogatory ("shitholes countries"). Trump never said a single word about Covid 19 hitting the black population far harder than any other—and why that might be so and what we could or should do about it. Trump's most disgusting lie was that he had done more for balck people than anyone since Lincoln.

Trump brushing off and disregarding/dismissing over 13% of the population—42 million in the 2010 Census—was a relief to his base. Add another 52 million Hispanics, or 16.7% of the population, and get another dose of relief. Let's close down the 2020 Census early to deprive these citizens of representatives in re-districting. In fact, let's suppress the vote. Republicans under Trump are allowed and encouraged to pretend civil rights is not on the table. Even the Supreme Court says so, judging that the Voting Right Act didn't need to be renewed. Institutionalization of racism is the Republican Party policy, right up there with tax cuts and preferential treatment for the rich, and those voters should be ashamed of themselves for omitting civil rights altogether from their list of priorities.

The Democratic party, the big-tent party that values civil rights, is also kicking itself for not having gotten its messages across. Aside from civil rights, what is that message? Google searches show a ton of people looked up "socialism" and asked whether Social Security and Medicare are socialist (they are). The extent of educational shortcomings of the American people is shocking. One of the many problems in the Dem Party is the cacophony of voices, in contrast to the Republicans, whose message is simple and clear—favor the rich, ignore civil rights.

One area is which the Dems failed was to get the message across that Trump's management of the pandemic is terrible, awful and really bad. Republicans in polls show they believed Trump's lies about bending the curve and getting a vaccine right away. The Associated Press reports that the counties with the highest number of Covid cases voted for Trump—overwhelmingly. "... in 376 counties with the highest number of new cases per capita, the overwhelming majority — 93% of those counties — went for Trump, a rate above other less severely hit areas."

This information belongs in two categories—the Dems failed to get their message across, and the Republicans make decisions on lies, wishful thinking and party loyalty to avoid facing Facts.

On the international side, assuming Biden prevails, we can ask "cui bono," or "who benefits?" It's early days but some obvious candidates include S. Korea, Canada and Mexico, and Europe and the UK. Weirdly, China benefits, too, from a less contentious relationship. China is already the winner this year. It's the only country with any real growth and the only one that is coming out of the pandemic. It's taking the opportunity to loosen capital controls to try to get a firmer handhold on becoming a global financial power to rival the West. It won't get there without Western property laws, but it's one hell of a start.

Another winner, strangely, is Iran, for a similar reason—reopening of talks. That's likely talks for us and relaxation of sanctions and embargoes for them, but hey, you gotta start somewhere. Ukraine might get some useful attention for rebuffing Trump. Who are the losers? N. Korea, Russia, and Turkey. We don't know how to evaluate what comes next.

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